banks on reasonable terms. • purchases of assets held by the private sector started and large - scale purchases of sovereign bonds were started in march this year. • it is no secret that i am no supporter of the plan to purchase government bonds. although the first small signs of success are apparent, we must still remain vigilant about the accompanying risks. above all there is the moral hazard that would emerge were some government to lose its appetite for reform. the falls in interest rates provoked by the massive purchases of bonds will lower interest rates temporarily on government borrowing and this must not be used as an argument for pushing vital but painful reforms to some point far off in the future. interest rates are only favourable for a short time and will support governments while they are making bis central bankers ’ speeches changes. if governments were to ignore the budget rules agreed in europe and were to start to increase their debts further, the measures taken by central banks would be of very little help. the other main task occupying central banks alongside monetary policy last year was the launch of single banking supervision. starting supervision and carrying out a thorough and comprehensive assessment of the assets of european banks needed a lot of work from central banks and financial supervision authorities. the successful conclusion of this work let us say with confidence that the biggest and most significant banks in a range of countries in europe are now assessed and supervised on the same terms. in estonia, swedbank and seb pank have come under single supervision. the estonian economy looking more closely at the estonian economy, it can be seen that the growth in estonia in 2014 came primarily from the domestic market. • domestic consumption was lifted by rising employment, falling unemployment, and strong wage growth and a simultaneous fall in prices. the economy grew faster in 2014 than in 2013, but it should be remembered that no return to the growth rates seen in the boom years of the last decade is to be expected. • it may be hard to get used to the idea of lower growth rates, but economic truths cannot be denied. the estonian economy and estonian demographics are in a different phase of development now, and long - term sustainable growth is notably lower at 3 – 4 %. consumer price inflation in estonia fell below zero in june 2014 for the first time since the crisis. four years ago prices fell across a wide range of goods and services, but last year the fall in prices was mainly caused by cheaper energy and food. eesti pank is not forecasting any rise in prices this year, but rising

as a member of the euro area. starting with the motivating factors, in one sense we do not need a motivating factor because when we all joined the european union in 2004, we made a commitment that the euro would be our currency. thus, the “ if ” question has already technically been answered and it is only a question of timing. for estonia as a small european economy highly dependent on trade, euro area membership was a natural goal stemming from close economic ties and similar cyclical behavior. a common currency with many of our main trading partners would reduce the costs of trading and more importantly deepen the economic integration that can drive all of the productivity improvements that will ultimately lie behind higher living standards. our main trading partners are in europe, so it is not an international issue for us but domestically important if we want to grow. in any case, our strategic choice two decades ago to tie our currency first to the dm, then to the euro, and a clear determination to never change this peg, meant that our macroeconomic environment was already very similar to that of a euro area member, and that the extra step towards full euro area membership would only be logical and natural. let me now turn to the process. when discussing such currency reforms, we often speak in terms of the date on which this takes place, which can leave the impression of a single event which suddenly brings great changes. in fact, the process element is crucial. we have been on a given path for 20 years, and we will be on this path for another few decades. therefore, bis central bankers ’ speeches it is many small steps that contribute and the actual date of conversion is somewhat less of an event. it is important, but especially if you have been tied to the euro for a very long period of time. it is of crucial importance that a country ’ s economic policy mix as a whole is credible and consistent. based on our own experience, we can say that much of the impact was already felt even before formal euro accession in terms of the investment flows and in terms of the restoration of confidence. finally, what have been some of the experience over the last more than two years? the precise impact of the adoption of the euro is very hard to determine as there were so many other things going on, most notably the global financial crisis. future generations of economists, with the benefit of hindsight and data will be better placed than us to make a firm evaluation of costs and benefits. nevertheless,