The Monetary Policy Committee of the Bank is concerned that the prevailing famine and drought in the country will result in a spike in inflation and so an appropriate policy response is required. The solution; most studies have advocated for improved agricultural productivity as the most effective way of addressing food crises associated with higher international prices and food security concerns.
In my remarks today, I will outline these decisions and explain the assessment of the current economic environment on which they were based. Following the recent euro area summit, I will also take this opportunity to discuss the future of our Economic and Monetary Union (EMU), pointing to priorities for the near term from an ECB perspective.