The good news is that the euro area is on a gradual but nevertheless fragile recovery path. But we face important challenges. First, inflation has declined to very low level and is expected to come back to levels close to 2% only very gradually.
Here, we have to ensure that these developments do not become entrenched in inflation expectations, which can pose a threat to our primary objective to maintain price stability. Second, while financial market conditions are improving, our accommodative monetary policy does not reach the real economy evenly. Credit conditions for SMEs in particular are still tight and access to credit is limited.