 Ladies and gentlemen, Vice President Nye are very pleased to welcome you to our press conference here in Nicosia. I would like to thank Governor Giorgiotti for her kind hospitality and to express our special gratitude to her staff for the excellent organization today's meeting of the Governing Council. Based on our regular economic and monetary analysis and in line with our forward guidance, we decided to keep the key ECB interest rates unchanged. As regards non-standard monetary policy measures, the focus is now on implementation. Coming up on our decisions of 22 January 2015, we will, on 9 March 2015, start purchasing Euro-denominated public sector securities in a secondary market. We will also continue purchasing asset-backed securities and covered bonds, which we started last year. As previously stated, the combined monthly purchases of public and private securities will amount to 60 billion. They are intended to be carried out until the end of September 2016 and will in any case be conducted until we see a sustained adjustment in the path of inflation, which is consistent with our aim of achieving inflation rates below, but close to 2% over the medium term. Further information on certain implementation aspects of the public sector purchases program will be released at 3.30pm on the ECB's website. We have already seen a significant number of positive effects from these monetary policy decisions. Financial market conditions and the cost of external finance for the private economy have eased further. Also following our previous monetary policy measures, in particular, borrowing conditions for firms and households have improved considerably. Moreover, money and credit dynamics have been firming. The substantial additional easing of our monetary policy stance supports and reinforces the emergence of more favorable developments of the euro area economy. In an environment of improving business and consumer sentiment, the transmission of our measures to the real economy will strengthen contributing to a further improvement in the outlook for economic growth and a reduction in economic slack. Thereby, our measures will contribute to a substantial return of inflation towards a level below but close to 2% over the medium term and underpin the firm anchoring of medium to long term inflation expectations. Let me now explain our assessment in greater detail, starting with economic analysis. According to Eurostar's flash estimate, real GDP in euro area rose by 0.3%, quarter on quarter in the last quarter of 2014, which was somewhat higher than previously expected. The latest economic data, particularly survey evidence available up to February, point to some further improvements in economic activity at the beginning of this year. In a head, we expect the economic recovery to broaden and strengthen gradually. The low level of the price of oil should continue to support households' real disposable income and corporate profitability. Domestic demand should also be further supported by our monetary policy measures leading to ongoing improvements in financial conditions, as well as by the progress made in fiscal consolidation and structural reforms. More over demand for euro area exports should benefit from improvements in price competitiveness and from the global recovery. However, the euro area recovery is likely to continue to be dampened by the necessary balance sheet adjustments in various sectors and the rather low pace of implementation of structural reforms. This assessment is also broadly reflected in March 2015, ECB staff macroeconomic projections for the euro area, which foresee annual real GDP increasing by 1.5% in 2015, 1.9% in 2016, and 2.1% in 2017. Compared with the December 2014 euro system staff macroeconomic projections, the projections for real GDP growth in 2015 and 2016 have been revised upwards, reflecting the favorable impact of lower oil prices, the weaker effective exchange rate of the euro, and the impact of ECB's recent monetary policy measures. The risks surrounding the economic outlook for the euro area remain on the downside but have diminished following recent monetary policy decisions and the fall in oil prices. According to the euro stats flesh estimate, euro area annual HICP inflation was minus 0.3% in February 2015 after minus 0.6% in January. The negative outcomes largely reflect the impact of the significant fall in oil prices since July 2014. On the basis of current information and prevailing futures price for oil, annual HICP inflation is expected to remain very low or negative in the months ahead. Supported by the favorable impact of our recent monetary policy measures on aggregate demand, the impact of the lower euro exchange rate and the assumption of somewhat higher oil prices in the years ahead, inflation rates are expected to start increasing gradually later in 2015. This assessment is also broadly reflected in the March 2015 ECB staff macroeconomic projections for the euro area, which foresee annual HICP inflation at 0% in 2015, at 1.5% in 2016 and 1.8% in 2017. In comparison with the December 2014 Euro System staff macroeconomic projections, the inflation projection for 2015 has been revised downwards, mainly reflecting the fall in oil prices. In contrast, the inflation projection for 2016 has been revised slightly upwards, also reflecting the expected impact of our recent monetary policy measures. The governing council will continue to monitor closely the risks to the outlook for price developments over the medium term. In this context, we will focus in particular on the past through our monetary policy measures, geopolitical developments, and exchange rate and energy price developments. When discussing the economic outlook and the new projections, the governing council acknowledged that the staff projections are conditional on the full implementation of all our policy measures. Moreover, the staff projections extend horizon to 2017. In this context, the governing council gained stress that the degree of forecast uncertainty tends to increase with the length of the projection horizon. Turning to the monetary analysis, recent data confirmed the gradual increase in underlying growth in broad money, M3. The annual growth rate of M3 increased to 4.1% in January 2015, up from 3.8% in December 2014. Annual growth in M3 continues to be supported by its most liquid components, with a narrow monetary aggregate M1 growing at an annual rate of 9% in January. The annual rate of change of loans to non-financial corporations was minus 0.9% in January 2015, after minus 1.1% in December 2014, continuing its gradual recovery from a trough of minus 3.2% in February 2014. The three-month accumulated net lending flows were positive in January, for the second consecutive month, compared with sizeable net redemptions still recorded a year ago. Despite these improvements, the dynamics of loans to non-financial corporations remain subdued, and continue to reflect the lagged relationship with the business cycle, credit risk, credit supply factors, and the ongoing adjustment of the financial and non-financial sector balance sheets. The annual growth rate of loans to households increased further to 0.9% in January 2015, after 0.8% in December 2014. Our recent monetary policy measures should support a further improvement in credit flows to sum up. Across check of the outcome of the economic analysis with the signals coming from the monetary analysis confirms the appropriateness of the governing council's recent decisions. The determined implementation of all our monetary policy measures will provide support to the euro area recovery and bring inflation rates towards levels below but close to 2% in the medium term. Monetary policies focused on maintaining price stability over the medium term and its accommodative stance contributes to supporting economic activity. However, in order to reap the full benefits from our monetary policy measures, other policy areas need to contribute decisively. Given high structural unemployment and low potential output growth in the euro area, a cyclical recovery along the lines of the March ECB staff projections is no grounds for complacency, in particular in order to increase investment, boost job creation, and raise productivity, both the decisive implementation of product and labor market reforms and actions to improve the business environment for firms need to gain momentum in several countries. It is crucial that structural reforms be implemented swiftly, credibly, and effectively, as this will not only increase the future sustainable growth of the euro area, but also raise expectations of higher incomes and encourage firms to increase investments today, bringing forward the economic recovery. Fiscal policies should support the economic recovery while remaining in compliance with the stability and growth pact. Full and consistent implementation of the stability and growth pact is key for the confidence in our fiscal framework. In view of the necessity to step up structural reform efforts in a number of countries, it is also important that the macroeconomic imbalance procedure is implemented effectively in order to address the excessive imbalances as identified in individual member states. So we are now at your disposal for questions, and as usual, questions about Cyprus will be addressed first by the governor of Cyprus. Thank you. And could I also ask everyone to limit themselves to two questions so that we can get through as many people as possible? I'll start with Jeff Black. Thanks very much. Good afternoon. Jeff Black from Bloomberg News. Mr. Draghi, could you perhaps explain to us a little bit what the governing council means by sustained adjustment in the path of inflation? That seems to be the criteria for success of your asset purchase program. So if you could tell us what exactly you mean by that. My second question is about Greece. The Greek government would like to be able to fund its short-term obligations by issuing more T-bills. Now the ECB has one of these T-bill limits in its control, namely the ceiling that's set on T-bills that can be pledged as collateral. So my question is would the governing council be willing to raise the ceiling at some point and under what conditions? Thank you. Thank you. The sustained improvement, it just says what it says. I mean there is no other way to answer to your first question. In other words, a material dislocation from the foreseen objective would be the criteria. But at this point in time we see absolutely no reason to think or plan or act in any different way from what we've planned, namely 60 purchasing of 60 billion euros a month of securities until September 2016 or beyond if needed. On your second point, as you know, I'll say more things, probably there will be more questions about Greece, about ECB and so on, but just a quick answer to your question is the following. ECB is a rule-based institution, it's not a political institution. One of the rules that we comply with is containing the treaty and it's the article 123 and it's the prohibition of monetary financing. Monetary financing is when the central bank of a country prints money to buy the government bonds of that country and it could be either direct or indirect when banks bring collateral to the ECB in order to be financed in order to buy the sovereign debt of that country. And we are prohibited from doing that. Thank you. Brian Blackstone. Brian Blackstone with Wall Street Journal. There are more and more government bond yields that have turned negative in the euro zone. You said in January that negative bond yields wouldn't prohibit you from doing QE, but is there a limit to how low, how negative these bond yields can be in order for you to purchase bonds in a negative yield? And my second question is, we've seen a major impact in the financial markets from the run-up to QE, the QE decision, equity prices at record highs, bond yields at record lows. Is there a danger that this policy is going to widen the wedge between the rich and the poor? People with access to financial markets are going to benefit, but the people in the euro zone who are without a job or are struggling might not see the fruits of the quantitative easing decision as much as people with access to the financial markets. Thank you. Now much has been said about, well, first of all, let me say our monetary policy decisions have worked. And it's with some certain degree of satisfaction that the governing council has acknowledged this. The monetary policy decisions we are discussing today are the final set of measures of a series of decisions that have been taken starting in June last year. And we see that the objectives are gradually being attained. And the market reaction to the announcement, the expectation first and the announcement second of our securities market program is also being quite effective and quite positive. Now we haven't even started that lively discussion about whether we'll actually be able to do this has developed. It's quite interesting that until a month ago nobody had any doubt that public debt, sovereign debt in the euro area was actually very, very big. And now some people worry that we won't have enough bonds. Incidentally, I'm told that the very same statements were made when U.S. and the U.K. started their bond buying program. So the bottom line of this is that maybe complexities, we think they are not relevant. We observed that half of the euro bonds are outside the euro area. And we also observed that the average weighted price of bonds in the two to 30 year maturity is well above par. Exactly it's 1.24%. So how negative we go until the deposit rate? Now the second question assumes that we basically, that the improvements we see in the financial markets will never pass through to the real economy. That's exactly what we have not been observing over the last few months. As a matter of fact, in a fairly, in a sort of more and more accelerated way, we've seen a decline, if not a steep fall in the lending rates across the euro area. A significant decrease in dispersion in the lending rates, you know from previous press conferences that fragmentation on the funding side for the banking system has basically disappeared several months ago, but for quite a time fragmentation on the lending side still remained. Well that has gone down a lot and one can say now that all rates have converged quite well, quite well. So what we are seeing now is that these benefits from a very accommodating monetary policy stance are being passed in the form of lower borrowing costs to the real economy, to non-financial companies, to households. We see for example the credit flows to households have increased and then we will see that the channels through which this securities market program works will get, will firm up, will strengthen the transmission through the usual signaling channel, confidence channel, interest rate channels, wealth effects, and exchange rate effect of course. Janis Angelis? Thank you. Can you just give us some time to get the translation? Yes. Try again. Yes. Yeah, now I can, yes. in a more specific way, to leave the previous positions, as much as the public account, as much as the protection of the changes that a program like this, as you think it is, can put forward a program like this again? Money donation. The second question has to do with a resolution. The program of personal gain, as you have said, is about the markets of state titles, but also private ones. The Greek banks, the four system banks, have been hidden as expenses after the three tests that have been implemented. This means that you will be able, you will be able, the European system banks, to move forward to the markets of state titles, the APS, the Greek system banks, regardless of what they do against the state bonds. Thank you. Well, let me first say something that perhaps is not entirely known. The ECB up to today has lent to Greece 100 billion euros, and more exactly has doubled its lending from 50 to 100 in the last month and a half, the last two months. The lending to Greece today is 68% of the Greek GDP, which is the highest in the eurozone. So in this sense, one can really say that the ECB is the central bank of Greece, but it's also the central bank of all the other countries, and it's a rule-based institution, as I have just recalled a moment ago. The ECB is the first to wish to restart the financing to the Greek economy, provided the conditions are in place, and the conditions to be in place is that a process which suggests a successful completion of the review be put in place fastly, that is the condition, and we will certainly welcome such development. Right now, go into your second question. Right now QE cannot the QE, I'm sorry, the ECB cannot buy Greek bonds. The purchase program doesn't foresee the purchase of private bonds. It cannot buy Greek bonds for a variety of reasons. First of all, the purchases are not supposed to take place for countries under a contract or a program during the review period. So in this sense, we wouldn't be able to buy either Cypriot bonds as well, or Greek bonds. Second, we have we can only buy investment-grade bonds and as such, the Greek bonds are not the threshold of investment-grade. So the waiver would have to be rain-stated. And we are ready to do so as soon as these conditions are in place. Third, we have a limit of 33% per issuers bonds. So we cannot buy more than 33% of the bonds of the total stock of the bonds issued by the same sovereign. And our current S&P holdings are such that this limit has at present overcome. So we wouldn't be able to buy these bonds, but as soon as Greece repays the S&P bonds that are due, that are coming due, I believe in July or August, then we would be able to and if the waiver had to be rain-stated, of course, we would be able to buy Greek bonds via this new purchase securities program. Thank you. John and Donald, please, Reuters. Can we please follow the questions and I will take everyone as I can. This is the European Central Bank and the European Central Bank and the EU and the European Central Bank and the EU and you have already outlined the financial accommodation you have offered to Greece. Much of it comes in the form of emergency liquidity assistance. Could you perhaps expand on the perhaps expand on the degree of willingness there would be to extend further emergency liquidity assistance towards Greece and if indeed today perhaps you've already decided to extend the limit beyond the current level. And also you talked about the need to respect the stability and growth pact in the Eurozone. Do you see a risk of let's say ill-feeling in the Eurozone if large countries are given additional flexibility and smaller countries on the periphery are required to stick to stricter limits in terms of spending? In fact yes we've raised the LA today that's what the governing council has decided by 500 million if I'm not mistaken. Now ELA the first I mean as I said ECB is a rule-based institution from this viewpoint both the decision about lifting the waiver as well as the decision not to allow monetary financing and finally the decision about determining and ELA are all the output of rules not our political decisions. ELA is a decision of the National Central Bank of Greece to which the governing council may decide to object with a very special and demanding majority requirement if certain conditions are not in place and one condition is that ELA can be given to solvent banks with adequate collateral. Now the Greek banks at the present time are solvent their capital levels are well above the minimum requirements and that's a positive news a lot has been done by Greece to strengthen its banking system. Capital has been raised there being restructurants there being consolidation some of the NPL the non-performing loan problems have been addressed so today the Greek banking system is solvent and is key to provide credit to the Greek economy. It's absolutely essential that this solvency be maintained because that is the precondition for ECB to be able to allow ELA and therefore financing to the economy financing to companies and households in Greece and the private sector in Greece and this is important I'm saying this because if there is in place a certain communication that creates volatility in the markets this communication destroys collateral increases the spreads and destroys collateral undermines the solvency of the Greek banking system communication is absolutely essential so that's the most important thing that we can do today is to preserve the solvency and the robustness of the Greek banking system and also to this extent DCB has asked the Eurogroup members to make sure that the recapitalization fund of something around 10 billion euros be readily available to face any sudden negative contingency that might materialize now so ECB has presented this request some language in the last Eurogroup statement reflects this request by the ECB sorry the second question was well I don't want to actually I don't want to comment on the ill feelings but certainly what I would suggest is you go back to the last let's see 15 and plus years and look at which countries have been most often in the excessive deficit procedure over the last say 15 16 17 years and then draw a conclusion from there but to address your point there is a sentence here that says full and consistent consistent implementation of the stability and growth pact is key for confidence in our fiscal framework thank you hello I know that you have already made a statement but still I want to know what would be the immediate impact or benefit for Cyprus from the CRE program can Cyprus benefit from the policy immediately because also for Mrs. Yovkachi as President Draghi explained countries like Cyprus which is which are under the program to get benefit from the program they must have a positive review by the Troika or the institutions whatever you like so unfortunately as you know the fifth review of the Cyprus economy has not been concluded yet and this is because the law for the foreclosures has not been put into effect when there will be a positive review we can start immediately and get the benefit of the program according to the parameters of the program the Cyprus economy can benefit up to 500 million euros throughout the effect of the program the program as President Draghi said in his initial statement we start on the 9th of March and it will go at least until September 2016 this program it will have very beneficial impact for Cyprus as it will press the interest rates and suppress the interest rates downwards and therefore the Cypriot government will be able to borrow at lower rates because this is the big benefit from the program and therefore we look forward to taking part in this program thank you. Claudi Perez. This is Claudi Perez from El País the Spanish daily in the last weeks we have seen negative yields in in public debt in some public debts in Germany even in five-year bonds are in negative territory as you certainly know do you think these countries Germany in particular should use this new fiscal space to guarantee the the effectiveness of the monetary monetary policy transmission mechanism and a second question if I may you take the the decision about the Greek waiver on February based on your doubts of the successfully conclusion of the program why the extension agreed by the euro group and the list of reforms sent by Mr Parofakis is not enough. Thank you well the answer to the second question is we we decided to leave the waiver but let me step back we decided to have a waiver in place at the time when there were reasonable assessments for a successful completion of the review of the program in other words by and large the program was on track let me explain why this is so we have this rule that says we can't accept as collateral bonds that are below a certain threshold the Greek bonds at present time are and where even then below this threshold however if certain conditions are in place as far as the economic policy is concerned that would these would make the ECB and the governing council think that in some time from now these bonds would become again eligible would be rated above the threshold then there are the conditions for the waiver and that's the decision taken at the time then we assess that these conditions were not in place it's quite clear that in mid-february when we decided this the program was not on track and it was not only an assessment that we were making it was an assessment explicitly stated by the government so at that point we really had no choice having said that we stand ready to reinstate the waiver as soon as we are able to make a positive assessment about a successful about the likelihood of a successful completion of the review the on the first point I frankly don't want to pass judgments of on specific individual countries fiscal policies what what I could say however is that the the monetary policy measures that we've we've decided on January but also for the previous ones to be fully effective need first and foremost strong structural reforms that is the otherwise we can provide as much credit as possible we can refinance the banking system so that they can lend as much money at the lowest interest rates but if the structural conditions are not in place there will be little incentive to use this credit I'm not saying that these measures are not effective I'm saying that their effectiveness is going to be lower and from our viewpoint that means it's going to take longer to get to our objective or price stability namely an inflation that is close but below two percent in the medium term thank you nicoz filipides I will speak in greek once again mr president in greek I will speak in greek can you hear me my name is nicoz filipides from skyte channel in greece I would like to ask you I I heard you say and I was glad to hear you say that you've approved the 100 billion liquidity to our country but we see that in the last 20 days you said that you decided this for about political criteria criteria because the momentum of the new government had been prevented let's say stopped um wonder the question is since the liquidity goes to the banks first the greek banks are they safe and second your decisions up to which level are they affected by the political decisions of the ministers of the euro group thank you you you rightly said you rightly remind us that the ECB has already lent not liquidity just lent 100 billion euros and I repeat it's 68 percent of greece GDP and it's the highest in the whole eurozone and it has doubled this amount in the last two months so the last thing one can say is that ECB is not supporting Greece now you asked the question to what extent our decisions depend on what happens from from what happens in the euro group the answer is to an enormous extent if there is an agreement about call it contract call it whatever you want our underlying our background changes completely and we would be much better in place to take favorable more favorable decisions for Greece and you know the reasoning really goes goes this way first of all once a country has a contract then disbursements could take place could be restored by the member states then market access could be restored and when there is market access one could get back the waiver not necessarily after market access but basically all all these things go together but most importantly if there is market access many of our concerns about monetary financing would disappear because if the government has the capacity to finance itself on the market then the issue of having banks financing the government would disappear so the ultimate result of all this is that flexibility to the greek government economic policy would return within the contract that the greek government would define with the other members of the euro group thank you claire jones claire jones financial times um from what i can see from the opening statement it seems that the inflation forecasts are based on large part about the futures market getting it right about the direction of oil prices but we're still in an environment where core inflation is at an all-time low um can you tell tell me a little bit about how you see the path of core inflation developing over the forecast horizon um does the forecast for 2016 is it more of reflection of the bounce back from oil prices or now that you're more bullish on the economy does it affect core inflation as well um second question to both yourself and the governor of the central bank of cyprus um it's almost two years now since the hercut and capital controls were imposed on separate depositors um knowing what's happened since then um do you think it's a decision you take again um i will i'll first answer my question and then governor will answer the other question um you are absolutely right core inflation is still still uh low uh although we've noticed just today that one of our measures of inflation expectations is now back to a fairly high level i wouldn't say an all-time high certainly not but uh three months or four months high yes i'm pretty sure so that is that is another news but i wouldn't rely too much on point observations because as they come they also go what we can say safely is that our monetary policy decisions of the last this one but also the previous one previous ones have stopped a decline in inflation expectations that had started uh at the end of july last year and it became more and more marked by year end now on uh it is it is true that our projections of inflation are basically as you said based on oil price futures oil price but also there are other factors which play a role for core inflation and one of course is again our monetary policy stance and its effects on the exchange rate the second one is the closing of the output gap that we foresee we foresee happening gradually between now and 2017 another factor is that a real disposable income is being supported by again not only by all prices but also by our monetary policy stance and here the the channel through which this might may happen is the following we are our monetary our monetary policy decisions have significantly decreased the risk of second round effects coming from lower oil prices on inflation you remember when we discussed the effects of lower oil price a few months ago we said they're a good thing but also there is a potential negative side to that if these effects transform produce second round effects which could have a deflationary impact then people will actually save more and consume less we believe that our monetary policy decisions have avoided this risk therefore we'll keep we foresee a savings rate which remains what it is today and the recovery where consumption gradually strengthens and firms up now all these factors will will have an impact on core inflation as well thank you no there is another question here for you yes the decisions were taken in March 2013 two years ago and they were very painful for the country and for its people however it is my view that under the then circumstances there were there was no other way we should have taken measures long before the very difficult decision was taken now the question was with regard to the capital controls capital controls also were inevitable until the restoration of the confidence to the banking sector but this is a decision taken by the minister of finance after the consultation with the governor of the central bank and i can assure you that it is the view of the minister of the government and of the governor that these capital controls will be soon the very few capital controls which are still in place very few only two or three measures will be very soon lifted before the end of the first quarter of the year thank you saga goryos question to mr drage and mr drage if i understood you correctly you said that during a review no program country could participate in the qe don't you think that it's a bit suspicious on behalf of the cb why or during those 15 days no qe would be allowed for a country under a program and my second question is you yourself last night during the dinner with the president of the republic referred to cyprus as good record of program implementation given this positive assessment by you is the ecb considering approving a request submitted by the government of cyprus for the conversion of the ela the emergency liquidity funding of bank of cyprus to a long term bond thank you on the first issue is is the same condition we have in omt during a review process we don't want to because of influence the review process via conditions that are special conditions for market access of the country so the it would be an element which would interfere with the negotiations so that is a standard rule that we have in place we had in place with omt as well on the second point i i'm not sure i know anything about that but it's just i give the floor to the governor with regard to the first question let me add to what president drage said that one prerequisite to participate in the program is that you have a positive review therefore during the review period you cannot participate in the program anyway since you need to have a positive review with regard to the second question with ela of course president drage was there in the meeting with the president and we have to remind you that as he said twice during his opening speech ecb is a ruled-based institution and ela is extended under a framework and rules of the ecb within these rules i can assure you that both the governor the central bank and the government is doing the best for the country thank you i'll give one last questions to our host i saw janis satan adis yes my question is this greek and cyprus are the only two countries that at this moment cannot participate in the qe program despite their favorable assessment for cyprus now the assessment is open up to the summer up to the summer um how long do you think this cyprus economy can last uh for this assessment i will answer in greek please since the question was in greek we believe and we hope and we urge the parliament that they oh sorry uh we we believe we expect we anticipate that the obstacle that exists for the completion of the fifth assessment for the fifth review and uh then the road will open for the law for foreclosures so once this is done the obstacle that exists will be lifted and we will be able to participate in the qe program i hope that that will happen soon sooner there could not be any waiver or exemption thank you very much