 Good afternoon and thank you very much for joining today's civil society webinar focused on the impact of your of the COVID-19 on the euro area economy I'm delighted to have here with us Frank Smith today Franks is the director general economics here at the ECB and he'll be walking us through the latest macroeconomic projections My name is Marie Therese-Bitterlich and I work in the civil society team in communications here at the ECB And I'll be moderating this event today The structure of this event is the same as previous events Apart from the slight difference that as you can see we're hosting it entirely remotely this time We'll start with a half an hour presentation by Frank and then we'll open the floor for your questions for the remaining half an hour of this event We'd like to encourage you to make good use of the q&a session as we'd like to keep it as interactive as possible And very much look forward to hearing your questions and comments Regarding the technical practicalities. I'm sure that by now we're all familiar with how virtual events work Nonetheless, we will show an instruction slide after Frank's presentation That just shows us how you might be able to take the floor in the q&a session If you have any questions in the meantime or are experiencing any technical problems, please feel free to reach out to us using the chat function Just remember that when you are using the chat function to please address it to all panelists This is very important for us to be able to see your question and get back to you as soon as possible As stated in the invitation of this webinar, we will be recording this And uploading it onto the ECB's website afterwards Without any further ado, I will now hand over the floor to frank for the presentation Frank the floor is yours Thank you very much. Marie-Thérèse And let me also warmly welcome all of you to this second seminar reviewing the impact of the pandemic on the euro area economy And the inflation outlook and the presentation as Marie-Thérèse said was will be based on our latest macroeconomic projections Which were published last week if you want to have more details you can always look at our website But there's also an article Going through some of the narrative behind the outlook Now when we first met in june of last year The first wave of the pandemic was just behind us and there were signs and some hope of a vigorous Though highly uncertain recovery in the second half of 2020 And we discussed some of the factors that may shape the recovery the behavior of Savings and pender of demand the evolution in the labor market and unemployment The corporate vulnerabilities and potential negative financial feedback mechanisms but of course also the evolution of the pandemic and the associated containment measures itself And the vigorous policy response That the health authorities fiscal authorities prudential authorities and of course the central bank Also took in in response to the crisis Now we are about one year after the world health organization called the global pandemic And i'm afraid most of the themes are still the same I mean we have been in the second half of last year been surprised by The vigorous bounce back of the economy in the third quarter But in the near term The outlook is still very uncertain And primarily driven by the evolution of the pandemic And the extension of the containment measures In the medium term, the picture looks a little bit more rosy The the risks to the outlook have become more balanced In particularly because now we have more visibility on the vaccination process But of course, this race between mutations and vaccinations is still Going on So what I would like to do in the next 20 minutes is is just go through some of the factors that shape the Outlook for the air economy and for inflation And then we'll open the floor for questions and discussion So let me share with you the presentation So these are some of the the key messages, but rather than going through them. Let me just go through them by going through the presentation um I mean the first Thing to to mention is that of course the short-term Outlook continues to be shaped by the evolution of the pandemic And the the policy response the containment measures In response to this pandemic So what you you see here on the the left hand side of this slide is the the quarterly growth pattern in real gdp in the euro area starting in the third quarter of last year and then Through the the the four quarters of of this year, which are part of our projections um And so one thing to to mention is that The bounce back that we saw in q3 was much Higher and vigorous than we had talked about in in june last year at that time we had Expected the bounce back of around eight percent In reality, we had a bounce back of about almost 12 percent So the economy seemed to be quite resilient when once the sort of lockdown was released unfortunately After the summer then the pandemic started again Intensifying with the second wave and in some countries now the third wave And this then led to a negative outlook for Real gdp But less than we had expected. So if you look at the q4 number We have there now a number of negative rate of minus 0.6 percent But which is better than we had assumed in december of minus 2.2 percent In addition in this quarter the current quarter We are expecting to have again a small Decrease in in real gdp, which is a bit worse than we had Expected but then in the course of this year, we expect quite a vigorous rebound From from from this subdued subdued elbow And if you like to see what this means for the level of real gdp, that's shown On the right hand side of this slide The blue Solid line basically gives you the quarterly path of the level of real gdp in the euro area Through the lens of the march projections And so you can see how sort of this bounce back was quite Vigorous in q3, but then they have this this little dip down As as as we speak in the last quarter of Last year and the first quarter of force year before We hope to see a recovery as some of the containment measures are are released and vaccinations Spread through the through the population um What this means in terms of annual expected growth rates is shown here in the in the table above so we have Somewhat a small slide uptick in in growth rate for 21 And then more or less an unchanged path for 22 and 23 And this is more or less in line with many other Forecasts, so it's a bit More optimistic than the ocd's recent Projections, it's a bit less optimistic than sort of consensus views out there In order to explain this sort of short term Uncertainty and the sort of the technical recession that We are going through the small technical recession that we're going through In last quarter in this quarter Of course one has to look at what's going on with the pandemic and here on the left hand side The blue line gives you the so-called oxford stringency index In inverted scale meaning When this index goes down then actually the Containment measures are are more restricted And you see that no as the second and third wave of the pandemic took hold Obviously the measures were Became stricter most stringent again They didn't really reach the the level that we saw in the first quarter of last year, but still They were quite high The other graphs in this Or lines in this left-hand side picture basically show you some of those mobility Indicators that are good sort of real-time indicators of Activity going on and so one of the things to take away from from the comparison between the stringency index the blue line and the other the the green orange and and red lines is that Activity has been less affected at least as captured by these mobility index In this second and third wave Suggesting that firms and households to some extent have learned to sort of adapt to the containment measures And probably also the governments Have sort of applied sort of smarter containment measures um, the right-hand side of this this graph basically shows that of course The containment measures do not affect the different sectors of the economy equally And in fact, we see what some have called a bit of a k shaped recovery whereby some sectors some segments of the the firms and of the households Are doing relatively well through this pandemic and and what you see here in the orange line is the manufacturing sector So this is the pmi index of activity Manufacturing actually is in an expansionary mode Since last summer and has stayed there even through the second and the third wave The third sector that is most affected as as as as you can expect is the services sector, which is the the red line And this is of course where The the firms and the sectors that rely on social interaction Are are situated and that are affected by restrictions on on consumption of those type of services So a k shaped. I mean, there's not much of a k there, but in any case, that's what they call the k shaped recovery um, now one feature of of the economic outlook that we have seen is that It's mostly driven by very weak consumption Now the counterpart of the weak consumption is the increase in the savings rate because because of you know, the government's action support measures such as the job retention schemes Incomes are often protected to some extent And whereas at the same time consumers cannot Spend at least all the things that they would like to to consume And as a result you have quite a bit of forced saving accumulating and and to give you just one Indicator of this on the left-hand side. You basically see the changes in cash And deposits are held by households and you see how it basically matches The evolution of no distringency Indicator so a lot of accumulated savings in March and April of last year when no, there was forced Saving and to some extent also some precautionary saving Then it came down, but still some saving going on partly because of precautionary measures the uncertainty That is still surrounding us and then as the second and third way Started getting hold You see again an increase in the in the in the savings And of course one of the the factors that we are looking at very closely Is how this accumulated savings, which is quite a large amount of money. We're talking about 700 billion of Accumulated savings. How this will be spent or used going forward Now the right-hand side a slide on this gives you some indication of the distribution Of this savings behavior, which is based on on a commission survey Which sort of asks different households about their financial situation in the past 12 months And their current savings and so what you see from this slide that is it's mostly the young That have been negatively affected. So the age bracket between 16 and 29 years By the pandemic crisis situation Whereas the retired people the the age bracket of more than 65 have not been affected very much In terms of the savings you get the opposite that it's mostly older households that have been able Who who have a stable income that have been able to to to to save While as the young haven't been able to save at all and of course that is important information also to Understand how some of that savings again will be be spent As the containment measures are released and the recovery takes hold because presumably Some of the older households Margin propensity to consume out of this Increased wealth is less than that of Of the art. So this is an important factor of That will shape and is shaping the economic outlook In our own sort of consumer expectations survey, we have been asking households about how long they think How long they think it will last before Large enough part of the population is vaccinated and and we sort of Go back to to to normal. You see that sort of the kind of the median Things that this will last another seven to 12 Months so basically till after the the the summer And again these type of and and this has deteriorated a little bit From from January to February. So so basically there's a the lengthening of this this this period And of course that also matters For for consumption Those households that think that the pandemic will be resolved earlier Expect that they will consume more Well, there is those things that that thing that it will take it takes still More than a year to To resolve the the health crisis Basically Safe and Therefore for the plan to to reduce Consumption again Important factors to to determine this this consumption path um Now the other element which is shaping the the recovery is what's going on in the labor market There I think the most important Policy that is is shaping what's going on labor market are the job retention schemes Which generally have been Lengthened or prolonged as the the the pandemic has has Raised its its head again um, the result is that we actually have seen positive employment growth in Second half of last year. That's what you see on the the blue bars on the left-hand side for for the euro area And when you think about the current quarter And that's what you see in the the the little red Line on the left-hand side that for the first time in the current quarter Employment expectations are positive. So they are in positive charity according to the pmi employment index again as with activity overall The impact on the labor market is is is very different across Sectors and on the right-hand side you see how this indeed is affecting sectors like manufacturing very different From what is called here low tech services sector, which is really Sort of a combination of accommodation food services transportation sectors so where the effect of the second and the third wave Is again felt also quite strongly on on on employment um now employment, of course is is one way of looking at the labor market another way and this is a Nicolle important way is to looking at how many hours are worked in the economy because Because of the job retention schemes, of course more people have remained in In working on employment relationship With their firms, but many of those have worked less than a full-time job This is something that is illustrated in this slide on the left-hand side I mean you see sort of the contribution of the various components in in the labor market to GDP growth and the biggest part of No, the recession in q2 is average hours worked which dropped by a large amount This is also something you see on the right-hand side where you also see somewhat of the differences across the main Euro area countries whereas employment has dropped quite a bit hours worked has Fallen much much more It has bounced back again as the economy was opened and has fallen again as the pandemic It has been hit and a big factor thinking about the situation labor market situation looking forward will be As the economy recovers as the pandemic is Is conquered What will happen? No with the jobs that are currently Covered by the job retention schemes in our assumptions. Most of those jobs will Will be sort of maintained but there will be a small rise also in unemployment Much less than we have previously expected. So that is good news But it is likely that there will still be a small rise in unemployment to come once these support measures run run out Um, let me actually skip this which is just more information about the labor market and skip to Of course another important factor That is shaping the recovery, which is the substantial fiscal support On the left-hand side here You see the big increase in the budget deficit in the euro area in 20 From no almost a balance To a deficit of more than 7% of GDP Looking forward Looking at all the the plans of the of the government and the extensions of some of the support schemes We expect that The deficit will remain Quite high and the support will remain quite strong in this year And before then as the economy recovers The balance will go back to something that is around 3% or below 3% and of course this this does have an impact On on the debt, which is what you see on the right-hand side graph Okay, now what about inflation? No, so our primary mandate is to maintain price stability One impact of the pandemic was to create quite a bit of slack in the economy to increase No unemployment to increase Reduce capacity utilization And that has had an impact on on inflation What you see here on the left-hand side Is the evolution of our headline inflation index, the HICP Annual inflation rate from February last year to February This year. I mean you see how over the past year. There was this big downward Shift movement From no inflation rate Close to one point Two point three percent to a negative inflation rate Through most of the second half of last year Most of that was driven by The contribution by the orange boxes that you see in this graph, which is really energy price inflation So energy prices fell Very pronouncedly in the beginning of the year and that had this lasting impact In fact Since then in January and February inflation has bounced back as you can see in the last two columns here And this is mostly driven by a number of temporary factors. I mean the first factor is that energy price inflation is now much less negative and that you see in the contribution of the Orange bars, which have a less negative contribution The other factors have to do with the Normalization of the VAT rate particularly in in Germany at the beginning of this year, which pushed up Also core inflation so inflation of services and What we call non-energy industrial Good goods so the the red and the gray Bars and in addition there were a number of technical factors which had to do with changes in the Consumption basket as a result of The pandemic situation where of course some services like travel services Are used much less than and other services or goods like food Um, so this also had had an upward impact and then there are a number of other technical factors related To the timing of of of sales now the result of all that is that There is somewhat of an upward as we had expected Or a reversal of the negative impact on the headline inflation But we expect and that this is what you see on the right That's a side that many of these temporary factors will again reverse At the beginning of next year. So over this year. We think we will see an increase of headline inflation which is now 0.9 Which will get close to two percent towards the end of the year, but then will fall back to lower levels And then gradually rise to 1.4 percent in 2023 as you can see now And of course this underlying subdued inflation behavior is still driven by the fact that we have Of course Still a lot of slack in the economy and and weak demand Again, this is just a table to give you the annual numbers of our inflation March inflation projections 1.5 percent for for this year and then Falling back and picking up again to 1.4 percent at the end of our projection Arise again more or less in line also with many other forecasters Let me just end with this last slide which is giving you some information also on inflation expectations from other sources on the left hand side, you see Inflation expectations from our survey of professional forecasters At different horizons the blue one is the 12th month ahead the yellow one orange one the 24th month ahead and then the five years ahead and you see that there is indeed an improved outlook For inflation, but it is still relatively subdued even for the five years ahead and away from Our inflation aim, which is no below but close to 2 percent We seem a stronger pickup in inflation expectations, but from lower levels in the market based expectation measures But again, mostly the same the same type of of of movement So let me End this this presentation Just by sort of give you kind of a The little kind of overview or the summary of this this sort of quick presentation So while the the overall economic situation Is expected to improve over 2021 There clearly remains uncertainty in the short term economic outlook And while our latest staff projection Exercise foresees a gradual increase in underlying inflation pressures Over the next two to three years It did does confirm that the inflation outlook remains broadly unchanged relative to december and below our inflation aim of below but close to 2 percent And in these conditions, no preserving favorable financing conditions, which is what what the the governing council of the ecb Sort of committed to or promised in december remains essential Now market interest rates have increased quite a bit since the start of the year Which poses a risk for for the wider financing conditions because um The riskless yield curve and also sovereign bond yield curve Our key reference rates for determining more general credit conditions And so if left unchecked these these increases in market rates could translate into a premature tightening of financing conditions for for all sectors of Of the economy, which is clearly undesirable at the time when Uh, it's it's still important to preserve these favorable conditions to reduce uncertainty in this Still uncertain world and to also bolster confidence and thereby underpin economic activity and safeguard medium-term price stability. And so it's against this background That the governing decided governing council decided last week To lean against the rise in bond yields by significantly increasing the pace of purchases under our tap program um So that that was the kind of the main decision of uh, of of of of last week and hope You sort of understand a little bit how The economic and inflation outlook was sort of an input into into that decision. So let me stop here and See what what questions there are and have a conversation Thank you very much frank for that very comprehensive, uh, summary and presentation on topic that clearly affects all of us, unfortunately still I'm sure that by now, uh, some of our participants will have questions and or comments that they would like to raise So if you would like to take the floor, please start raising your electronic hand now The hand is a small button that should be located on the right hand side of your screen underneath the participant list Once I see your hand, that's a signal for me that you'd like to take the floor And my colleagues in the background will connect you once I raise or read your name Please bear with us as this might take a moment or two You'll be automatically unmuted so you can start speaking immediately We also encourage you to turn on your camera. Should you wish to do so? And uh, please introduce yourself first, uh before asking your question Remember also to lower your electronic hand after you've taken the floor This just makes it easier for us to identify if you'd like to take the floor again So we're especially interested to hear in your perspectives and uh top and uh any research you might have on this topic So feel free to share that with us In case of issues, again, please feel free to chat with us and just remember to chat with all panelists I can see the first hand raised by mr. Matthew I hope I have pronounced your name correctly and apologize in advance in case I haven't I believe this is from the european trade union confederations um, thank you very much for this presentation and for for the little event and update on the very current issues going on I have one One or two general question and one a small question about your presentation The first general question, uh, would be indeed. I am from the european trade union federation and i'm here speaking On on it was about the general escape close Of the of the stability and gross pact At the end of the press conference Your president Last week mentioned also that she would like the the debate on the fiscal rules to uh, uh, um, how could I say to uh, uh Take off quite quickly In order to have new rules when the general escape close will be deactivated Uh, I wanted to have your view on that Keeping in mind for us that indeed we are supporting very much the the prongation of the fiscal support both I mean at the member state but for workers and businesses and we see a strong as you have mentioned uncertainty For keeping a lot of support. So, uh, that's why I just wanted to have your general view about the general escape close And the debate on the fiscal rules because the commission As is not so clear about when Uh, uh, the consultation on economic governance and fiscal rules should be should resume We do think that it has to resume very quickly for being in position to have the new fiscal rules as soon as we can The second question is just a little question. Uh, it's about when you spoke about Spain Uh, I mean when you spoke about employment, especially, uh, twice pen was mentioned with Piggers which were worse than the rest Of the other member states and of the eurozone. Uh, it was just to know Whether the the confinement was stronger over there We know basically that has been touched more and uh, like italy or member states like that But I just wanted to have your confirmation on this. Thank you very much Thank you very much, uh, Matthew. Um So first of all on on the uh, the general escape close and and sort of the fiscal policy, uh context Um, I mean first of all, uh, as as our president and also the governing council in its its communication has emphasized in these circumstances Now where monetary policy is also at that has already very low Interest rate. It's very important that fiscal and monetary policy work hand in hand as our our president Says and this is more or less what is going on. I mean as I showed in in the the actual Figures or graphs on The fiscal fiscal support Now going forward. I think it is important that I mean as long as the pandemic is there policy institutions and particularly The fiscal authorities no provide a bridge for households for firms to cross that That that pandemic river Um, and I mean so far. This is exactly what many governments have done now Once of course, we're out of the the pandemic which again, hopefully Will be sooner rather than later. There will be still a need to support the the recovery um, and I think this this this has been sort of acknowledged in in in the fact that most likely The general escape clause will be extended to 2022 Of course, it's also acknowledged in the next generation EU program Where again We at ECB and the president was again quite vocal on this in at the european parliament yesterday Where we think it's very important that the whole ratification process implementation Takes place as soon as possible because this is really The funds that Have very important two important features To to address some of the challenges. The first one is That they are associated with you know investment in some of the areas that will be very important To sort of as some would call it build back our economies better So the digital area and also the the green economy area and secondly Because of course it is financed through bond issues By the european commission. It's also an instrument that can Address some of the heterogeneities. I mean you mentioned spain. You mentioned italy some of the heterogeneities that We do see in in the current crisis and also in Probably in the in the recovery. So that is very important. Now. What about the sgp? Again, this is really for for obviously for the commission to To to to to lead and to to to manage it. It's not our business But I think Again, the president and public council is on on record That they think that she thinks that indeed it is important to to reform the sgp and to do it As soon as possible Basically, which means probably no in the second half of this year or after after the summer so that indeed When the the current support Measures run out also the new sgp framework is is is there to to to guide fiscal policies through through the recovery on spain, I think basically It is true that in in many indicators and particularly in the labor market Spain seems to be one of the most affected countries at least of the big Euro area countries And of course, it's it's a number of factors But probably the most important is The fact that of course tourism and and so the services factors sector this particular services sector that is um affected most by Some of the the containment measures and the restrictions on on travel is of course one of the most important sectors in in in spain. So that's the I would say the main factor more than differences in how The the health policies or containment policies Have been have been maintained Thank you very much for kicking us off there I see another hand raised from mr. Martin schmaltz reed From coface families europe. We're going to connect you. Please bear with us for a moment Yeah, martin schmaltz reed senior policy and advocacy manager at coficy families europe So thank you very much for your invitation With regards to inflation the mainstream theory argues that by lowering interest rates You can increase inflation by encouraging borrowing and therefore spending But there might be a new way of viewing this relationship that businesses and households borrowing needs are rather steady And the prices directly reflect the cost of borrowing that is that when the cost of borrowing increases Then you adjust your prices to offset that cost Now with this view keeping interest rates low prevents inflation from increasing So do you see interest rates increasing anytime soon? And also I saw that in your slide you skipped a slide on lending and the situation of lending So if you could quickly comment on the lending situation, that would be great. Thank you very much Yes, I mean, thank you very much for for these two interesting questions On the relationship between interest rates and inflation, I mean Clearly, uh, I mean we still think and most of the evidence Uh, that I know of still suggests that on average Fall or an easing of interest rates does stimulate the economy through a number of channels um Not only a sort of the the cost of finance Channel which I would agree in the current circumstances is probably weaker than usually Definitely for households because uh, obviously It's actually difficult to to to spend I mean even if you wanted to buy a car or a fridge And and needs to to to lend to to finance that I mean, it's not it's not the time But there are many other channels to which low interest rates help One is through affecting the exchange rate Another one is through reducing the interest burden Of those households firms and of course also the government That uh that are borrowing and at least in our analysis this still Um, this still dominates some of these Reverse effects, which um, which which clearly are there to some extent Now on on the the question of Is there like a cost push channel of interest rates? So when interest rates rise financing costs increase And of course that increases costs of firms Which then increase prices I think there is indeed some evidence for those firms that are heavy borrowers That this channel Exists, um, but I think it's only a partial channel and secondly, I'm not sure That's is what we would like to do to get inflation. No, I mean, it's not that it would be healthy for the economy To increase the cost of finance just in order to make sure that prices prices increase But it's definitely something that that is is there and this is also partial a partial effect But I don't think it it dominates and it doesn't reverse the optimality of keeping Financing conditions favorable in the current circumstances um Then on lending. Yes. So, uh, basically what what happened Is quite different for from lending to firms versus lending to households on lending to firms. It was a big Sort of borrowing a binge in March and April Which was facilitated by many of the policies that No, not only the central bank, but but also the governments know who guaranteed some of those loans and also the supervisors who allowed banks, uh, to to to to to make those loans at at Easier sort of capital conditions Um, but since then, uh, there's these flows the monthly flows of loans has has basically dropped And now is is very amidst around the last flow was around zero Um, now this reflects different factors. First of all firms seem to have Also saved like households a lot of the cash that they borrowed in the early part of the uh, the pandemic And so there's no need from a liquidity perspective to borrow more in the second and third wave Secondly, and that's of course less Uh, less positive In the current circumstances Clearly the uncertainty is so high that many firms have postponed investment plans and so they have less demand for uh, for loans and for borrowing Because of that because there's less investment and again that obviously we would hope would Change whenever the economy starts growing again And and so so these are basically the two Main factors that explain why Loans now there's another effect that that we're watching out very carefully and that is Um, that's the sort of the the credit standards that banks Have the vis-a-vis firms that they don't tighten too much in the current circumstances So there there's some indications that they haven't been tightening somewhat which is to be expected because of course the risks Of those loans has has also increasing but overall bank lending conditions are still very Very very low on the on the household side. We have more of a A stable growth Of loan growth rate of loans for mortgages Through throughout this this this bender Thank you very much for that question and answer We have two more people who would like to take the floor and we'll be taking them in the following order First from mr. Giuseppe Guerrini who is from the european confederation of industrial and service cooperatives Followed by miss sorka edwards who's from housing europe and then I believe we might have Time for one more question. So please Use the opportunity to raise your hands to For the last question. Thank you very much Okay, thank you. Thank you very much for this very interesting Webinar I have just a question about the npl regulation proposed from European commission What is your opinion because npl regulation is very important for people for managing the loans also for Small and medium enterprises and many cooperatives are small and medium enterprises and for example The bank regulation treatment of npl Is a lost coverage regulation It don't help a bank and Debtors in having enough time to reconcile the relation of restructure Indeed it help what you found in the aqua npl at lower price. What is your opinion about that? Thank you very much Sorry for my bad English No, no, that's that's perfect Perfectly understood I'm afraid I don't really have a good answer because I'm I'm It's it's a little bit outside my sort of daily responsibilities the the npl Regulation, I mean what what I can say is that no so far We haven't seen much of an increase in npls But that's of course because of all the support measures that have taken place and also the the moratoria And we of course expect that some I mean there has been an increase in in loan loss provisions to some extent But we expect of course that this will rise to some extent Once those support measures are sort of dialed down and it will be important from and the macroeconomic perspective to To to to really monitor this this closely so that we don't get into a sort of negative feedback loop between rising loan losses and tightening sort of more fragile banks tightening credit centers by banks And again more problems for for for the firms but the details of of the npl regulation. I'm afraid This is not This is not in my In my area Thank you, Frank. We have the question from Ms. Sorker Edwards Yes, so we we are representing the local housing for social public and cooperative housing providers We're about to launch The end of next week our state of housing report and The results show and from we compare also to own cd and studies and moody predictions That there will be an increase in the in the demand for social and affordable housing And particularly from those groups who may have Whose employment have been hit hard by the crisis and particularly for young people So obviously this is a national issue, but we we do have and more Let's say the ecb is becoming a little bit more vocal on that issue. So I'd like to hear if there is If there are any plans or any advice to go to to member states I just want to last point on that. We see that France whose social housing system is financed based on people's savings is actually doing very well so their libra system and based on Savings from the general population has been used now to lever additional european funding And to boost the supply of social housing. So it's interesting to see your figures there on on savings as well Let's add that into the discussion. Thank you very much. Yeah, thank you very much For this question, which I think is it's an important social issue And it's also one of the things as you may know Now we're going through a strategy monetary policy strategy review exercise and We've had many sort of ecb listens events to to see what are some of the concerns that are are living in in in in the general public and the issue of the cost of housing and particularly sort of owner Occupied housing, but I think it's more more more general because of the of course the rental and the owner's market is is is linked Is one of the issues that has come up frequently and particularly coming from again young and Poor households And it's one of those no kind of side effects of having this low interest rate environment which is pushing up House prices, which of course we we monitor now one clear Again, this is not in our remit. No as a as a central bank But but it is clear that one way of of trying to address some of these issues is by governments thinking about the supply of housing and the supply of social housing More generally again, this is for for government governments and and the the appropriate institutions to to To to to decide But at least through our policy of preserving favorable financing conditions. I mean also for for governments over this pandemic emergency period We sort of have make our sort of small contribution Mr. Bent Bonder from the europe peoples forum Please Society and other relevance I wonder when you hear uh, you prioritize What you do how much do you actually ask? The the the civil society Yes, I I'm not sure I got the full question, but the question I understood is uh, whether we also reach out to civil society organizations Uh in the context of our monitor policy strategy review and uh, I guess the answer is yes Yes, you do But no, no, no the question was more when you prioritize You're you're doing two different sectors and and How much do you actually ask? the stakeholders outside the bank What what their priorities are well, um I mean in terms of our no objectives No, what we're trying to achieve of course That's given by by the treaty. No, so the primary objective Is to to maintain price stability? um then In addition, you know, the treaty tells us to also support the general economic policies of of the eu and uh, I mean one part Of our strategy review is exactly to review how to interpret that That that part of part of the the mandate and um As as part of that, of course, we we look at a number of other considerations including I mean employment including climate change the including financial stability considerations um, but in the end All these considerations have to be seen in the context of our primary objective which is price stability so it mean I don't know if this answers, but no, no, no. Well, frankly, honestly, no, no, I appreciate that and I honestly also knew that but but It's a bit more concerned when it comes to the um more practical implementation of supporting the policies of your second objective, if you could say whether you actually ask the civil society organizations or you ask civil society their views on on on what could be your policies Well, again, I think this this has I mean In the context of the strategy review, um, we have organized these listen Listen events and there is actually a report on our website which kind of summarizes some of those uh Um suggestions, no and and and what what, uh, the the various, uh, I mean also Uh individuals, but but also civil society organizations are suggesting Now, of course, um, if you read that report, you will see there's a very diverse set of views on the one hand You have, of course, civil society organizations that basically make the case for their No, their case for their their interests On the other hand, you have a quite a number of citizens out there that sort of worry a little bit about the kind of the mission creep of the the central bank and Worry about the fact that no, uh, we we take on too much And that this may endanger our price stability and exactly sort of that's that's That's why I started by saying no to the primary man. It is Um, of course, uh, but but but but clearly this is not, uh, sort of an easy task at the same time No, the treaty is a treaty and so To the extent that there are important objectives uh of the eu that We can support in the pursuit of of our mandate That will be that's one of the the topics of the strategy review. But for that, you know, you will have to Be a little bit more patient Till after the summer Okay, thank you Thank you very much and uh with an eye on time. I'm going to close this webinar I'd like to thank frank very much for joining us today for this lively discussion And I'd like to also thank all of the civil society organization Representatives who have taken the time on board today to share with us their contributions as well We'd be really interested to hear your feedback on today's session But also if you have any suggestions with regards to future topics of webinars, please feel free to let us know So we'll be posting a link to a quick feedback survey in the chat and we'll also be following up with you with an email With the same link. So we would appreciate if you could take two minutes to fill out the survey This is really helpful for us to be able to ensure that we're continuously improving the webinars and Providing you with as much value as we hope we can We look forward to seeing you at future events And if there's anything that you would like to get in touch with us in the meantime Or if there's a question that you didn't manage to ask also maybe due to the technical problems We had earlier. Please feel free to reach us using our email address Which is civilsociety at ecb.europa.eu And with that I'd like to wish you a lovely afternoon and hopefully also a nice weekend. Thank you very much for joining