In clearer terms: whatever the limits of the February “Brussels agreement”, I am strongly in favour of the UK remaining within the EU; yet, irrespective of the outcome of the British referendum, the EA can and should pursue further integration. 1  Helmut Schmidt, Remarks at the Farewell event for European Central Bank President Jean-Claude Trichet, October 19, 2011. 2  Building Europe, building institutions, Speech by Jean-Claude Trichet on receiving the Karlspreis 2011 in Aachen, 2 June 2011. 3  Speech by Mario Draghi, President of the ECB, at SZ Finance Day 2015, Frankfurt am Main, 16 March 2015. 4  European Union: progress or regress?, Dinner speech by Ignazio Visco, Governor of the Bank of Italy, Istituto Affari Internazionali 50th Anniversary Conference, Rome, 13 November 2015. 5  Agnès Bénassy-Quéré and Xavier Ragot, Conseil d’Analyse Economique, A Policy Mix for the Euro Area, March 2015 , or Daniel Gros and Cinzia Alcidi, European Parliament In-Depth Analysis, Economic policy coordination in the euro area under the European Semester, November 2015. 2  BIS central bankers’ speeches  Second, tensions and heterogeneity within the EA, especially between the so-called core and periphery, have been exacerbated by the crisis so that the prospect of risk sharing may be perceived as involving permanent transfers across economies. Pooling risks would thus be seen as involving moral hazard, with permanent suspicion of “free rider” behaviour. Yet, we must realise that heterogeneity across countries calls for reinforced cooperation, based on risk reduction together with risk sharing.

Traded goods’ inflation – a portion of which are imported and the rest are directly affected by global prices – increased substantially compared to the previous two years. Its contribution to headline inflation was about 73 percent in 2009. 1.5.2  Bank of Albania’s monetary policy  The weakening of economic activity and domestic inflationary pressures, our forecasts for a contained inflation in the future and the anchored expectations of economic agents provided room for pursuing an easing monetary policy in 2009. This policy was materialized in two interest rate cuts by 0.5 percentage points each in January and October 2009 to 5.25 percent, and in the continuous injection of liquidity required by the market and the economy. By means of this prudent monetary policy, the Bank of Albania aimed at creating appropriate monetary conditions for a balanced and long-term development of the country. The key interest rate cuts were instantly passed through to the short-term interest rates in the interbank market, which declined and were less volatile than in 2008. On the other hand, these movements were not fully and instantly transmitted to the interest rates on banking loans and deposits. As in all other countries, the increase of the liquidity premium, the higher uncertainty and the deterioration of the banking system’s financial results were amortizing factors for the easy monetary authorities’ measures. However, our monetary policy and our interbank market operations managed to successfully avoid a detrimental contraction of banks’ balance sheets, something that many emerging countries had to go through.