WEBVTT - ECB's Christine Lagarde Talks  Iran War's Impact, Rates and AI

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

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<v Speaker 2>As Global Finance Chief's Way the fallout from the Iran

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<v Speaker 2>War Bloomberg's Francine Lacrosse. It's down exclusively with the President

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<v Speaker 2>of the ECB, Christine Lagarde.

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<v Speaker 3>Let's listen in.

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<v Speaker 4>How's the euro Area economy holding up in the face

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<v Speaker 4>of the Iran War.

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<v Speaker 1>Well, let me take you back to February twenty seventh.

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<v Speaker 1>Europe was really on a great path and was well positioned.

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<v Speaker 1>So we had recovery underway. We were going to increase

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<v Speaker 1>our projection most likely. Inflation had been under control, oscillating

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<v Speaker 1>around our two percent target for almost a year, and

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<v Speaker 1>unemployment was at rock bottom. An employment participation was still

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<v Speaker 1>significantly high. And then the war started and that created

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<v Speaker 1>a situation of I think increased fragmentation. Everybody talks about

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<v Speaker 1>the asymmetry of the shock, which is one of the

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<v Speaker 1>largest energy shock that we have ever seen on a

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<v Speaker 1>global basis, and with that going on, I think that

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<v Speaker 1>there was a movement of.

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<v Speaker 3>More integration.

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<v Speaker 1>So you have a fragmented world which becomes I think

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<v Speaker 1>more fragmented, more fragmentation and determination to better integrate. So

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<v Speaker 1>we are at this interesting moment where there is damage caused,

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<v Speaker 1>there is value lost, there is destruction of that. I

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<v Speaker 1>don't think that Europe is that the epicenter of that.

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<v Speaker 1>It's clearly Asia which is the first victim of the

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<v Speaker 1>situation in terms of economic losses. And I don't think

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<v Speaker 1>that we should be forgetting the direct losses of people

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<v Speaker 1>having being injured, being displaced, and the destruction that has

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<v Speaker 1>taken place that will require reconstruction efforts, and that I

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<v Speaker 1>think is and should be at the front of our

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<v Speaker 1>mind as we look at the economic consequences.

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<v Speaker 4>On the world economy. How much of a drag does

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<v Speaker 4>it have on GDP forecasts? Again, oil prices fluctuate.

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<v Speaker 1>So much, you know, the direct impact on GDP is

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<v Speaker 1>going to be measured by the you know, the IMED,

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<v Speaker 1>the World Bank, the OECD to a lesser extent because

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<v Speaker 1>it doesn't have the whole constituency, but all of them

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<v Speaker 1>are revisiting downward their projection. I think it's you know,

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<v Speaker 1>minus zero point three compared with what they had expected.

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<v Speaker 1>We are revisiting as well our growth forecast and our

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<v Speaker 1>inflation forecast. We have published that as you know, and

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<v Speaker 1>we have revised inflation to two point six percent growth

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<v Speaker 1>to zero point nine and then and then the evolution

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<v Speaker 1>is going to be a factor of how long, how deep,

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<v Speaker 1>how propagated the crisis is, and we central bankers are

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<v Speaker 1>left with defining the baseline, which is based on the

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<v Speaker 1>most accurate information we have, what we think will happen.

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<v Speaker 1>And because this information that we have is constantly changing

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<v Speaker 1>and we have a high degree and predictability and uncertainty,

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<v Speaker 1>we have to work on scenarios, factoring in how high

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<v Speaker 1>oil and gas and all six A, NA and derivatives

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<v Speaker 1>of those products will be, how long it will last,

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<v Speaker 1>and how fast the situation will be recovered, And we

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<v Speaker 1>keep looking at current data as they come in, and

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<v Speaker 1>thanks to Bloomberg, for instance, this comes in on a

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<v Speaker 1>very regular basis, and we try to figure out where

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<v Speaker 1>we are relative to the baseline and where we are

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<v Speaker 1>relative to the various scenarios that we have laid out.

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<v Speaker 4>And I think you laid it out as three scenarios, baseline, adverse,

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<v Speaker 4>and severe.

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<v Speaker 1>I would call the baseline the baseline and the other

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<v Speaker 1>two the scenarios the scenarios.

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<v Speaker 4>So where are we now?

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<v Speaker 1>We are in between the baseline and the adverse, So

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<v Speaker 1>we have baseline adverse severe. So currently, but you know,

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<v Speaker 1>when I say currently, you have to look at you know,

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<v Speaker 1>the price of the burial, the price of the various

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<v Speaker 1>categories of fuel, the price of futures, and all of

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<v Speaker 1>that applied to gas as well to determine where we

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<v Speaker 1>are exactly relative to these two. But we are somewhere,

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<v Speaker 1>I think, in between the baseline and the adverse scenario.

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<v Speaker 4>So how quickly can that change from baseline to scenarios?

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<v Speaker 3>It changes every day.

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<v Speaker 1>So the difficulty of US central bankers is that we

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<v Speaker 1>need to take a medium term view. This is how

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<v Speaker 1>we define our target. You know, this price stability that

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<v Speaker 1>defines our mandate is done by reference to the medium

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<v Speaker 1>term results and at the same time facts data. A

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<v Speaker 1>number of ships blocked here, volume of oil extracted varies

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<v Speaker 1>almost on a daily basis. So we need to do

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<v Speaker 1>this somehow schizophrenic exercise of keeping our eyes on the

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<v Speaker 1>medium term and making sure that we deliver our mandate,

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<v Speaker 1>but at the same time checking the data almost daily.

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<v Speaker 4>So what does it mean for monetary policy? Does the

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<v Speaker 4>baseline already warrant a hike?

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<v Speaker 1>What it means for monetary policy is that we have

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<v Speaker 1>to be It means two things. We have to be

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<v Speaker 1>completely agile and ready to move in the direction that

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<v Speaker 1>is required. And second we have to be data dependent,

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<v Speaker 1>as we have repeatedly said. But it does not predicate,

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<v Speaker 1>as we speak today from sin that we will go

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<v Speaker 1>in one direction or the other. And it's certainly doesn't

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<v Speaker 1>you know, determine a rate path that I can confirm today,

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<v Speaker 1>and any of the colleagues who are confident that is

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<v Speaker 1>going to be one way or the other or don't know.

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<v Speaker 3>Honestly, does the ECB have a title?

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<v Speaker 1>But don't forget one thing. The baseline and all our

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<v Speaker 1>scenarios are designed and formulated with the incorporation of what

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<v Speaker 1>the market assumes and no other monetary policy or fiscal

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<v Speaker 1>policy decision affecting baseline or either of the two scenarios.

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<v Speaker 4>Do you think there's a tightening bias the YOUCB?

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<v Speaker 3>No, I think there is.

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<v Speaker 1>We have a we have a compass which indicates price

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<v Speaker 1>stability predicated on financial stability. Those are the two I

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<v Speaker 1>wouldn't call them bias.

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<v Speaker 4>How different is it from the shark in twenty twenty

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<v Speaker 4>two and how different will your response be?

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<v Speaker 1>Well, it's different from twenty twenty two in many ways.

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<v Speaker 1>If you look back, inflation was completely different, interest rates

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<v Speaker 1>were completely different. The shock was a combination of supply

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<v Speaker 1>and demand. It was a vastly different situation, and I

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<v Speaker 1>think Europe was affected in a much more significant way

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<v Speaker 1>than it is at the moment because we had this

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<v Speaker 1>sudden stop that came out of the war, the unjustifiable

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<v Speaker 1>war of Russia against Ukraine, which brought to halt the

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<v Speaker 1>delivery of gas that was very sudden.

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<v Speaker 4>I mean, at the time, central banks were blamed for

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<v Speaker 4>acting too slow. Is there a danger? I mean, how

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<v Speaker 4>does that impact Again you're thinking is time?

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<v Speaker 1>Look, I think we've said very clearly that we would

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<v Speaker 1>need data to act, but that we would not hesitate

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<v Speaker 1>to act. I think it really captures well the position

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<v Speaker 1>that we have. We need the data in order to

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<v Speaker 1>analyze whether it's you know, see through, it's going to

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<v Speaker 1>be short lived, we will get back to you know,

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<v Speaker 1>you know, back to the past if you will, although

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<v Speaker 1>I don't think that's actually possible, and we need all that.

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<v Speaker 1>So it's either the see through, which doesn't require that

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<v Speaker 1>we take any particular decision, or it's going to be

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<v Speaker 1>long lasting, it will peak higher and it will require

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<v Speaker 1>action on our part. Or it will be somewhere in between,

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<v Speaker 1>which will then require judgment on the part of the

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<v Speaker 1>Governing Council to decide whether or not the indirect effect

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<v Speaker 1>and the risk of secondary effect might deanco expectations, which

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<v Speaker 1>then you know, would require action as well.

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<v Speaker 4>So I was at a dinner yesterday with the Treasury

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<v Speaker 4>Secretary who was saying that actually he thinks this will

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<v Speaker 4>be short lived.

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<v Speaker 1>But he's a political leader as well as being a

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<v Speaker 1>terribly competent person, But he's a political leader. I'm not

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<v Speaker 1>a political leader anymore. And our job as a central

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<v Speaker 1>banker is to stay in our line, to observe our

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<v Speaker 1>framework we have one, thank you very much, and to

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<v Speaker 1>identify whether or not we are in a situation of

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<v Speaker 1>short lived look through or long lasting act and possibly

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<v Speaker 1>decisively or in between, which requires a very subtle identification

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<v Speaker 1>of how much when in order to make sure that

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<v Speaker 1>infection expectations are anchored and we do not get the

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<v Speaker 1>secondary effect.

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<v Speaker 3>So that's that's the job.

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<v Speaker 1>It's the difficulty of what we have to do at

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<v Speaker 1>the moment while at the same time very seriously looking

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<v Speaker 1>at the medium term and being attentive to the short term.

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<v Speaker 4>And so your gut feeling for what we're living through.

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<v Speaker 4>Now you'll act quicker than in twenty twenty two.

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<v Speaker 1>I don't have a gut feeling, you know when i'm

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<v Speaker 1>you know, I hear the music of this is short lived.

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<v Speaker 1>We will go through that you can see through. First

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<v Speaker 1>of all, we decide what we have to do point

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<v Speaker 1>number one, point number two, you know, to explain to

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<v Speaker 1>the fisherman who cannot go at sea because he cannot

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<v Speaker 1>pay for is petrol, or when I think of, you know,

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<v Speaker 1>the household that doesn't know whether they'll be able to

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<v Speaker 1>pay for the refilling of the fuel tank, or whether

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<v Speaker 1>I think of the guys who have to drive to

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<v Speaker 1>work and who see the price of all at the

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<v Speaker 1>pump going up and up and up. Take I take

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<v Speaker 1>the see through story into account, but this is not

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<v Speaker 1>something that you can actually explain, which requires from our perspective,

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<v Speaker 1>in order to align in the most effective way monetary

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<v Speaker 1>and fiscal policies, It requires that we have a dialogue

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<v Speaker 1>with the fiscal policy leaders and ask them to be

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<v Speaker 1>targeted and temporary, transparent and tailored and all those TTTT

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<v Speaker 1>when they design support packages or help for the people

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<v Speaker 1>who are the fisherman the housekeeper, the house hold or

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<v Speaker 1>the guy who is driving his car.

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<v Speaker 4>Given where we are, now, what does worst case scenario

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<v Speaker 4>for growth and inflation look like?

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<v Speaker 3>The worst case scenario is war in any event.

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<v Speaker 1>You know, as former head of the IMF, I have

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<v Speaker 1>seen successful program being completely wiped out by war. So

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<v Speaker 1>war is in any circumstances the worst outcome. If you

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<v Speaker 1>talk in strict economic terms and the movement of goods

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<v Speaker 1>and all that, it's the you know, it's the Strait

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<v Speaker 1>or fore or Moose not being open for shipping and

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<v Speaker 1>transportation because you have to twenty percent of gazanol going

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<v Speaker 1>through that as well as you know, the like of

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<v Speaker 1>ingredients necessary for fertilizers, ingredients necessary for microchips and what

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<v Speaker 1>have you not going through the Strait.

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<v Speaker 4>So what's the pain threshold for the Euro Area economy

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<v Speaker 4>that the ACV would have to act on? Is it

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<v Speaker 4>inflation at three four percent?

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<v Speaker 1>Or is it look we have forecast for inflation that

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<v Speaker 1>vary between two point six which is the baseline that

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<v Speaker 1>we have, and a little north of four percent based

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<v Speaker 1>on what I told you earlier, you know, which is

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<v Speaker 1>see through strong decisive reaction or somewhere in between, depending

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<v Speaker 1>on the factors that we see. We will adjust because

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<v Speaker 1>we will be agile, but one thing for sure is

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<v Speaker 1>that we will keep out two percent.

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<v Speaker 4>Madame again, how worried are you about the discrepancy between

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<v Speaker 4>spots and future oil prices and so potentially tighter markets

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<v Speaker 4>that we're pricing in.

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<v Speaker 1>I think it's the whole dilemna that we have about

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<v Speaker 1>short and medium term. And you know, the more anxious

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<v Speaker 1>and worried economic actors are about the resolution of this crisis,

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<v Speaker 1>the more pressure there will be on the spot market.

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<v Speaker 4>How much do you blame the US administration for what's

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<v Speaker 4>happening to the European economy?

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<v Speaker 1>You know, it's not my job to do, you know,

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<v Speaker 1>blame two point finger or to associate this or that

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<v Speaker 1>with blame. I'm more in the hope section myself, and

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<v Speaker 1>I very much hope that people can sit at the table,

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<v Speaker 1>can come to their sense and understand that it will

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<v Speaker 1>be in the best interest of the global economy of

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<v Speaker 1>the people that a war settlement is reached and that

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<v Speaker 1>not just a cease fire, and that we can navigate

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<v Speaker 1>through the straits.

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<v Speaker 3>Of the world.

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<v Speaker 1>How long that's a ramification with international law, But let's

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<v Speaker 1>not go there.

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<v Speaker 3>I'm a reformed lawyer. As you know.

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<v Speaker 4>We can go there if you want. I mean, is

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<v Speaker 4>it something when you look at the economic fallout? Actually

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<v Speaker 4>in general, even if there's a truce, if there's lasting peace,

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<v Speaker 4>how long does that play out for?

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<v Speaker 1>I think there are two dimensions to that. One is

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<v Speaker 1>for shipping to resume under regular, normal conditions, it will

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<v Speaker 1>take I don't know whether it's two or three months.

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<v Speaker 1>I listen to the experts and I try to understand

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<v Speaker 1>how long it takes to fill in the ships again,

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<v Speaker 1>to move the tankers around, and to deliver. I think

0:14:23.680 --> 0:14:25.560
<v Speaker 1>most of them are saying that it's a two or

0:14:25.600 --> 0:14:30.520
<v Speaker 1>three months job for the shipping and the distribution production.

0:14:30.720 --> 0:14:32.920
<v Speaker 1>Refinery that seems to be another matter. And when you

0:14:32.960 --> 0:14:38.240
<v Speaker 1>look at the rafaelasan refinery facility in Qatar, they say

0:14:38.240 --> 0:14:39.680
<v Speaker 1>that it's not months, it's years.

0:14:39.720 --> 0:14:41.800
<v Speaker 3>That we're talking about some of.

0:14:41.760 --> 0:14:45.720
<v Speaker 1>The facilities in Saudi where its pipeline probably shorter, but

0:14:45.840 --> 0:14:49.480
<v Speaker 1>some of the other facilities will require long term fixing

0:14:49.520 --> 0:14:52.600
<v Speaker 1>and adjusting and repairing and setting it up again.

0:14:52.960 --> 0:14:54.520
<v Speaker 4>I mean, given all of this, is there too much

0:14:54.520 --> 0:14:56.200
<v Speaker 4>financial exuberance in markets?

0:14:57.920 --> 0:14:59.920
<v Speaker 3>You know, what is a little strange is that.

0:15:04.280 --> 0:15:09.280
<v Speaker 1>There is a tendency Bison to assume that it's business

0:15:09.280 --> 0:15:11.640
<v Speaker 1>as usual. And I think there is a bit of

0:15:11.640 --> 0:15:17.400
<v Speaker 1>a dichotomy between what between those who regard business as

0:15:17.480 --> 0:15:20.120
<v Speaker 1>usual and those on the other hand, who are saying,

0:15:20.480 --> 0:15:23.720
<v Speaker 1>watch out. It's a very significant shock and we are

0:15:23.760 --> 0:15:26.600
<v Speaker 1>not about to see the end of that process because

0:15:27.000 --> 0:15:30.320
<v Speaker 1>there will be ramifications. They will be impact on the

0:15:30.360 --> 0:15:34.120
<v Speaker 1>price of you know, processed and unprocessed food. There will

0:15:34.120 --> 0:15:37.600
<v Speaker 1>be an impact on the supply chain if it lasts longer.

0:15:37.680 --> 0:15:39.680
<v Speaker 1>And we are not going to see exactly the same

0:15:40.120 --> 0:15:42.720
<v Speaker 1>disruption as during COVID, but something that will be in

0:15:42.800 --> 0:15:45.040
<v Speaker 1>between normal and COVID disruption.

0:15:45.720 --> 0:15:47.640
<v Speaker 4>But do you worry about financial stability? I mean there's

0:15:47.640 --> 0:15:48.640
<v Speaker 4>also private marked.

0:15:48.480 --> 0:15:49.040
<v Speaker 3>You always do.

0:15:49.480 --> 0:15:54.080
<v Speaker 1>Yeah, I always worry about financial stability and price stability

0:15:54.120 --> 0:15:56.880
<v Speaker 1>because they are intrinsically.

0:15:57.440 --> 0:16:00.160
<v Speaker 3>Interdependent. So, you know, we.

0:16:02.080 --> 0:16:06.320
<v Speaker 1>In the supervision function of the ECB and all supervisors

0:16:06.400 --> 0:16:09.760
<v Speaker 1>around the world have to be very attentive to financial risks,

0:16:10.080 --> 0:16:13.960
<v Speaker 1>whether sort of declared and disclosed risks which hopefully have

0:16:14.400 --> 0:16:17.160
<v Speaker 1>mitigating factors associated with it. At least that's what the

0:16:17.200 --> 0:16:22.560
<v Speaker 1>regulation is doing. And the rampant risks the various you

0:16:22.600 --> 0:16:25.160
<v Speaker 1>know black swans that are there.

0:16:25.520 --> 0:16:31.000
<v Speaker 4>What worries you the most in all of this, you.

0:16:30.880 --> 0:16:34.720
<v Speaker 1>Know, it's what worries me, both in good and in

0:16:34.760 --> 0:16:36.920
<v Speaker 1>good and bad, and I hope we'll never have. The

0:16:37.000 --> 0:16:41.240
<v Speaker 1>ugly is the impact of artificial intelligence on our economies

0:16:41.920 --> 0:16:48.800
<v Speaker 1>and the outcome and the governance of artificial intelligence. And

0:16:48.920 --> 0:16:51.320
<v Speaker 1>what I mean by that is what impact will it

0:16:51.400 --> 0:16:54.760
<v Speaker 1>have on just not just on productivity where our star

0:16:54.880 --> 0:16:58.240
<v Speaker 1>will go, which obviously matters to US central bankers, but

0:16:58.400 --> 0:17:01.480
<v Speaker 1>what impact will it have on our societies? How many

0:17:01.480 --> 0:17:05.719
<v Speaker 1>people will be unemployed, how many people will require retraining,

0:17:05.840 --> 0:17:06.399
<v Speaker 1>risk killing?

0:17:06.600 --> 0:17:07.520
<v Speaker 3>Who will pay for that?

0:17:07.880 --> 0:17:11.720
<v Speaker 1>The whole you know, fiscal equilibrium that will result from

0:17:11.880 --> 0:17:16.600
<v Speaker 1>the massive transformation that is expected in many corners. That

0:17:16.600 --> 0:17:20.000
<v Speaker 1>that keeps me not awake at night.

0:17:19.880 --> 0:17:21.200
<v Speaker 3>Because I try to get some sleep.

0:17:21.800 --> 0:17:24.520
<v Speaker 1>But it's it's it's.

0:17:24.160 --> 0:17:26.000
<v Speaker 3>A big issue. It's a really big issue.

0:17:26.160 --> 0:17:29.240
<v Speaker 4>Are governments thinking about that? Given given there they're also

0:17:29.280 --> 0:17:33.000
<v Speaker 4>dealing with this massive energy crisis.

0:17:34.320 --> 0:17:38.240
<v Speaker 3>Now I've been in government few years of my life.

0:17:38.359 --> 0:17:42.040
<v Speaker 1>What is really difficult is is to focus on the

0:17:42.080 --> 0:17:46.280
<v Speaker 1>day to day, to mind the next election, to respect

0:17:46.320 --> 0:17:49.000
<v Speaker 1>your program or or the expectations that your voters have,

0:17:49.600 --> 0:17:53.960
<v Speaker 1>and yet at the same time to anticipate what will

0:17:54.000 --> 0:17:59.679
<v Speaker 1>be the effect of major breakthrough innovations, significant developments. And

0:17:59.720 --> 0:18:02.520
<v Speaker 1>I think that in that category, AI is something that

0:18:02.560 --> 0:18:05.160
<v Speaker 1>we need to have at the front of our mind

0:18:05.280 --> 0:18:08.359
<v Speaker 1>because it is moving so fast and because the impact

0:18:08.440 --> 0:18:09.320
<v Speaker 1>of it can be so.

0:18:11.400 --> 0:18:12.800
<v Speaker 3>Disruptive for good or for bad.

0:18:12.880 --> 0:18:15.560
<v Speaker 1>I think the development we've seen with Anthropic and Metals

0:18:15.640 --> 0:18:19.600
<v Speaker 1>is a good example of a responsible company that is

0:18:19.640 --> 0:18:23.600
<v Speaker 1>suddenly thinking, Ah, that could be really good, but if

0:18:23.600 --> 0:18:25.800
<v Speaker 1>it falls in the wrong hand, it could be really bad.

0:18:25.960 --> 0:18:27.840
<v Speaker 1>We need to do something about it. I don't think

0:18:27.840 --> 0:18:31.520
<v Speaker 1>there is a framework. You know, everybody is keen to

0:18:31.560 --> 0:18:34.239
<v Speaker 1>have a framework within which to operate. I don't think

0:18:34.280 --> 0:18:37.800
<v Speaker 1>there is a governance framework that is there to actually

0:18:37.920 --> 0:18:40.360
<v Speaker 1>mind those things we need to work on that.

0:18:40.840 --> 0:18:44.400
<v Speaker 4>Do you think financial institutions are prepared for I think

0:18:44.400 --> 0:18:46.880
<v Speaker 4>there's been called to meetings in various corners of the world,

0:18:46.920 --> 0:18:49.359
<v Speaker 4>and I know that we at the ECB will be

0:18:49.400 --> 0:18:53.119
<v Speaker 4>talking are talking to financial institutions to alert them to

0:18:53.200 --> 0:18:55.760
<v Speaker 4>those risks. Yes, and then Maritell we also had elections

0:18:55.760 --> 0:18:59.080
<v Speaker 4>in Hungary over the weekend. What does Orban's defeat mean

0:18:59.240 --> 0:19:01.280
<v Speaker 4>for Europe and the world.

0:19:02.720 --> 0:19:07.280
<v Speaker 1>I think I'm looking at Magyar Peter magiar victory, which

0:19:07.440 --> 0:19:11.400
<v Speaker 1>was significant, you know, landslide result.

0:19:11.760 --> 0:19:14.160
<v Speaker 3>He has two thirds majority.

0:19:14.600 --> 0:19:18.880
<v Speaker 1>He can change this new prime minister, can change the constitution,

0:19:19.680 --> 0:19:23.080
<v Speaker 1>remove you know, a number of obstacles to both growth

0:19:23.240 --> 0:19:27.720
<v Speaker 1>and integrity in the governance of that country, and I

0:19:27.720 --> 0:19:31.800
<v Speaker 1>think that that is really to be welcomed. The second

0:19:31.840 --> 0:19:36.080
<v Speaker 1>thing that you know, it tells me is that Hungary

0:19:36.240 --> 0:19:39.960
<v Speaker 1>is in the European family, and what I heard recently

0:19:40.040 --> 0:19:44.320
<v Speaker 1>is that this new Prime Minister, Peter Magyar, is indicating

0:19:44.400 --> 0:19:48.200
<v Speaker 1>that he would like to see Hungary join the euro

0:19:48.320 --> 0:19:51.840
<v Speaker 1>Area and the florent of Hungary be replaced by the

0:19:51.880 --> 0:19:54.760
<v Speaker 1>euro which I think is the natural path of all

0:19:54.800 --> 0:19:59.240
<v Speaker 1>twenty seven, well twenty six actually it excludes Denmark, but

0:19:59.720 --> 0:20:03.200
<v Speaker 1>six member states are expected to be part of the family,

0:20:03.720 --> 0:20:06.600
<v Speaker 1>and we have twenty one. If Hungary goes through the

0:20:06.640 --> 0:20:09.879
<v Speaker 1>process of integration, the convergence and all of that, it

0:20:09.920 --> 0:20:13.360
<v Speaker 1>would be a great achievement and it would coincide with

0:20:13.400 --> 0:20:14.960
<v Speaker 1>what was expected by the founders.

0:20:15.359 --> 0:20:17.960
<v Speaker 4>Do you think that the talks on adoption of the

0:20:18.000 --> 0:20:19.919
<v Speaker 4>Europe by Hungary will happen in your mandate.

0:20:21.880 --> 0:20:26.720
<v Speaker 1>Wow, you'd have to extend my mondate a little bit,

0:20:26.760 --> 0:20:28.360
<v Speaker 1>which I think is not in the cards.

0:20:29.880 --> 0:20:31.280
<v Speaker 3>I'm happy to stay, but.

0:20:32.720 --> 0:20:37.320
<v Speaker 1>No, because you know, convergence requires a number of reforms,

0:20:37.359 --> 0:20:42.880
<v Speaker 1>some of which I think Hungry is going to consider

0:20:42.920 --> 0:20:47.880
<v Speaker 1>and hopefully implement. The judicial one is appointed case, and

0:20:47.920 --> 0:20:52.119
<v Speaker 1>then it requires an adjustment period, which is usually you know,

0:20:52.160 --> 0:20:55.800
<v Speaker 1>anywhere between two and a few more years, depending on

0:20:56.520 --> 0:20:59.639
<v Speaker 1>which country you look at in terms of other practices.

0:20:59.680 --> 0:21:02.480
<v Speaker 1>But the convergence process takes a bit of time. You know,

0:21:02.520 --> 0:21:04.680
<v Speaker 1>you need to align a lot of parameters, you need

0:21:04.720 --> 0:21:07.000
<v Speaker 1>to have the same legal basis.

0:21:06.600 --> 0:21:08.000
<v Speaker 3>On many many aspects.

0:21:08.080 --> 0:21:11.120
<v Speaker 1>But I'm delighted that you know, he's he's looking at

0:21:11.160 --> 0:21:15.320
<v Speaker 1>it with with with a very positive approach, and he's

0:21:15.440 --> 0:21:17.960
<v Speaker 1>picking up on that basis which has not been the

0:21:17.960 --> 0:21:18.800
<v Speaker 1>case for a long time.

0:21:19.160 --> 0:21:22.040
<v Speaker 4>Talking about your mandate. Will you see it out? Will

0:21:22.040 --> 0:21:23.280
<v Speaker 4>you fully finish your mandate?

0:21:23.640 --> 0:21:26.560
<v Speaker 3>Look, when you know, when there is.

0:21:28.160 --> 0:21:31.760
<v Speaker 1>Big clouds on the horizon, the captain does not leave

0:21:31.800 --> 0:21:34.280
<v Speaker 1>the ship. And this captain is not going to leave

0:21:34.280 --> 0:21:38.280
<v Speaker 1>the ship because I see clouds, the biggest cloud.

0:21:39.160 --> 0:21:42.200
<v Speaker 3>Well, you know, then what do you see?

0:21:42.320 --> 0:21:45.640
<v Speaker 1>Well, we all, we're all facing the same situation with asymmetry,

0:21:45.640 --> 0:21:49.240
<v Speaker 1>as I indicated. But when you see you know, major disruption,

0:21:49.840 --> 0:21:55.159
<v Speaker 1>the energy supply being being reduced, when you see threats

0:21:55.200 --> 0:21:59.160
<v Speaker 1>to growth, upside risk to inflation, this is, this is,

0:21:59.359 --> 0:22:03.840
<v Speaker 1>These are a serious matters that we have to to

0:22:03.880 --> 0:22:07.399
<v Speaker 1>be attentive to and and to keep under control so

0:22:07.440 --> 0:22:10.840
<v Speaker 1>that our price stability, our two percent target is not

0:22:11.000 --> 0:22:13.560
<v Speaker 1>going to be varied from