Jean-Claude Trichet: European integration - the benefits of acting
collectively
Speech by Mr Jean-Claude Trichet, President of the European Central Bank, at the Feri
Foundation award ceremony, Frankfurt am Main, 9 June 2010.
* * *
Lord Mayor,
Mr Stammler,
Mr Sloterdijk,
Mr Görlitz,
Ladies and gentlemen,
It is a great pleasure to be here paying tribute to the winners of this year's Feri Foundation
Award and share a few thoughts with you on this occasion. Given that we will have an ECB
Governing Council meeting tomorrow, let me clarify from the outset that nothing in my
remarks this morning should be interpreted with regard to current monetary policy issues.
Turning to today's event, I am impressed and deeply moved by the charitable work done by
the various foundations that have won this award over the years.
As different as they are, they all have several things in common. They all strive to make a
difference to our society. And they do so through targeted efforts, acting in a way that
complements the work of public institutions. The work they do is a heartening expression of
their solidarity with their fellow citizens, and they deserve the gratitude of society as a whole.
The challenges ahead of us
Solidarity will also be the focus of my remarks today. However, I will approach it from a
slightly different angle - a European angle, as befits a European institution such as the ECB.
My main message today is that, in the current circumstances, the very existence of solidarity
can give rise to confidence.
The financial crisis, which has lasted quite some time, has placed our economies and
societies under considerable strain. Policy-makers have had to make bold and far-reaching
decisions in order to address the most acute of challenges. They have done so in order to
preserve the cohesion within and across our societies.
We have also begun work on the more profound reforms that will need to be implemented if
we are to address the underlying deficiencies that have become apparent in our financial
systems. We need to make our financial institutions more resilient and re-establish a sense
of values, in particular a strong sense of responsibility vis-à-vis the real economy. To achieve
this, legislators and regulators may have to introduce a new set of incentives for those
operating in the financial sector.
This is one of the lessons that we have learned from the financial crisis. Other lessons
concern the construction of Europe, where we have to make a quantum leap in strengthening
the governance of economic policies and surveillance. If we do this, I believe that we will exit
the crisis with a policy framework that will be much better and stronger than the one we had
when the crisis began.
Some observers have said that the solution to our difficulties lies in more - not less -
European integration, and I agree with this view. Let me explain why.
Working together to meet these challenges is not just an act of solidarity; it is very much in
the best interests of all the participating countries and their citizens. Monetary Union is not a
matter of convenience; it offers us protection and improves resilience, provided that we
embrace the underlying ideas and principles. Just as the idea of statehood is that citizens
gain from acting collectively, the European Union embodies the idea that nations also gain
from acting collectively.
European integration is a long-term process, one that began after the Second World War and
has brought stability and peace to our continent. The crisis is now prompting us to ponder the
direction in which our next steps should take us. This discussion is taking place not because
we have failed, but because we have been successful. Europe has succeeded in virtually
everything it has sought to achieve.
The ECB's responsibility
As regards the ECB, we are responsible for ensuring medium-term price stability in the euro
area. The citizens of Europe can rely on us to focus on this objective at all times.
We have the tools we need to ensure price stability over the medium term. The fact that the
ECB has full statutory independence gives us credibility in our pursuit of price stability.
The mandate and independence of the Eurosystem are enshrined in the Treaty. The people
of Germany and the other countries of the euro area can rely on us to continue delivering
price stability in the years to come, just as they have been able to rely on us in the first
111⁄2 years of Monetary Union. During that period the general price level has risen by an
average of just below 2% per year - in line with our definition of price stability and better than
was achieved by any of the currencies that merged to form the euro.
Conclusion
Ladies and gentlemen,
Public policy-makers make decisions on behalf of the people. In Economic and Monetary
Union, monetary policy decisions are delegated to an independent central bank: the ECB.
This framework is appropriate and has delivered the results that the Treaty demands and
that our 330 million fellow citizens expect from us, namely medium-term price stability.
The framework for policy-making in the area of fiscal policy needs to inspire the same level of
confidence as the framework for monetary policy. The crisis has shown that reforms to
improve fiscal surveillance and control are needed in order to achieve this.
These reforms are necessary, and they are under way. Looking back, it is a pity that it has
taken a crisis for everybody to realise this. Looking ahead, I think that everybody now
understands. Let me close my remarks this morning - which I repeat have no bearing on
current monetary policy matters - by recalling that in Economic and Monetary Union we
share a common destiny.
Wir teilen ein gemeinsames Schicksal.
Thank you for your attention.