And many people in Germany, as elsewhere, on seeing that they are hardly earning anything on their savings, are wondering if we are ever going to see an end to quantitative easing. Today, the risks for growth and inflation are tilted to the downside. The best service that the ECB can provide to the citizens of the euro area is to fulfil its mandate so that inflation returns towards 2%, which requires the economy to pick up again, jobs to be created and exports to the euro area to find solvent outlets. We are aware that the low interest rates also have negative effects, notably on savings, and could pose risks to financial stability if they were to stay low for too long. We don’t want this monetary policy to last too long, but we will apply it for as long as necessary in line with our mandate. 2  BIS central bankers’ speeches  In other words? Governments need to take action and implement the necessary reforms in order to consolidate confidence and growth, and to demonstrate a credible fiscal policy. If the euro area policy for growth rests exclusively on the ECB’s shoulders, things will end badly! Admittedly, we are nowhere near that point. But we sense that there is a temptation to rely entirely on the ECB. What key measures do governments need to implement specifically in order to restore growth?
The measures included in this plan would have a positive impact of 0.2 pp on the average GDP growth rate. situation, use of the Next Generation EU (NGEU) funds and financing conditions that, while somewhat tighter than in previous quarters, remain favourable. Turning to the inflation forecasts, in step with the paths of the corresponding futures markets, the upward pressures of the energy component are expected to peak in the second quarter of 2022 and then decelerate. The inflation projections rest on two assumptions: (i) that, in line with the information from the EBAE, the pass-through of higher intermediate costs to final prices will only be relatively moderate (albeit more forceful than envisaged in the December projection exercise); and (ii) that the second-round effects will be limited, i.e. scant feedback effects between inflationary pressures on prices and wages. Inflationary pressures will be partly alleviated by the measures contained in the National Plan to respond to the economic and social consequences of the war in Ukraine.4 Furthermore, these projections do not yet include the possible changes in prices on the electricity market that are currently being negotiated in the European Union. Against this backdrop, the projections see inflation standing at 7.5% in 2022. It will then fall in 2023 to around 2%, thanks, above all, to the moderation of the energy component. Underlying inflation will not start to decline until end-2022, once the upward pressures on firms’ costs associated with energy prices and bottlenecks have corrected.