The banking union represents one of the greatest achievements of European integration. Banks are now supervised at the European level, which enables risks that transcend national borders to be identified. Completing the banking union, in particular by setting up a European deposit insurance scheme, should be a priority for national governments. If we look back 40 years, it’s clear that Spain today is a more prosperous and modern country. However, we must not forget that much remains to be done. Improving the functioning of the labour market is still an outstanding issue – more than 3 million people remain unemployed, and the youth unemployment rate is still above 30%. But there are grounds for optimism. Following the collapse in GDP during the hard years of recession, Spain, supported by the European Central Bank’s measures, has reached an annual growth rate of 2.8% over the last five years, well above the European average. Spurred by the need to search for new markets during the years in which domestic demand tightened4, Spanish businesses have managed to find opportunities overseas and many are now global leaders in their sectors. Spanish society has worked very hard to return to economic growth after almost a decade marked by the crisis, and it has done so while remaining true to its commitment to Europe. 40 years ago the Spanish people voted for a better country – one that was democratic, open and modern. The 1978 constitution and the process of European integration have enabled us to make this better country a reality.
On the basis of current information and prevailing futures prices for oil, annual HICP inflation is expected to remain very low or negative in the months ahead. Supported by the favourable 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 0.0% in 2015, 1.5% in 2016 and 1.8% in 2017. In comparison with the December 2014 Eurosystem 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 closely monitor the risks to the outlook for price developments over the medium term. In this context, we will focus in particular on the passthrough of 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 March staff projections extend the horizon to 2017.