To sum up, a cross-check of the outcome of the economic analysis with the signals coming from the monetary analysis confirmed that an ample degree of monetary accommodation is still necessary for the continued sustained convergence of inflation to levels that are below, but close to, 2% over the medium term. 2/3  BIS central bankers' speeches  In order to reap the full benefits from our monetary policy measures, other policy areas must contribute more decisively to raising the longer-term growth potential and reducing vulnerabilities. The implementation of structural reforms in euro area countries needs to be substantially stepped up to increase resilience, reduce structural unemployment and boost euro area productivity and growth potential. This is particularly important in view of the overall limited implementation of the 2018 country-specific recommendations, as recently communicated by the European Commission. Regarding fiscal policies, the mildly expansionary euro area fiscal stance and the operation of automatic stabilisers are providing support to economic activity. At the same time, countries where government debt is high need to continue rebuilding fiscal buffers. All countries should continue to increase efforts to achieve a more growth-friendly composition of public finances. Likewise, the transparent and consistent implementation of the European Union’s fiscal and economic governance framework over time and across countries remains essential to bolster the resilience of the euro area economy. Improving the functioning of Economic and Monetary Union remains a priority.
We are closely monitoring the impact of the recent interest rate reductions in the euro area on Switzerland. Should there be a need for action, the SNB will take the necessary measures. The export-weighted real external value of the Swiss franc remains well above its long-term average. Since the introduction of the minimum exchange rate, it has changed only slightly. Thus, the Swiss franc is still high. The slight inflation differential during the past quarters meant that the real adjustment of the Swiss franc against the euro has come to a virtual standstill. In this environment, the minimum exchange rate remains essential for guaranteeing appropriate monetary conditions. SNB monetary policy To conclude, I would like to mention a number of challenges which the SNB will be facing in the near future. Overall, the environment remains extremely challenging for both the Swiss economy and our monetary policy. With its high level of international integration, Switzerland is strongly affected by global developments, especially those in neighbouring countries. The ECB’s measures to support economic development in the euro area are also likely to have a favourable impact on the Swiss economy in the medium term. Nevertheless, given the low interest rates in Europe and the rest of the world as well as the strong Swiss franc, the SNB’s monetary policy environment will remain highly complex. We will continue to take all action necessary to fulfil our mandate of ensuring price stability, while taking due account of economic developments.