jean - claude trichet : reflections on the european economic and monetary union speech by mr jean - claude trichet, president of the european central bank, at the evangelische akademie tutzing, tutzing, bavaria, 13 november 2010. * * * ladies and gentlemen, i would like to thank the organisers for inviting me to speak here today. this is a crucial time for the european economy and for the global economy. vital debates about the state of and interactions between the world ’ s major economies have been taking place at the g20 meetings of ministers and governors a few weeks ago and at the g20 summit in seoul yesterday. within europe, there is a particularly vital debate about the framework of governance for economic and monetary union. both debates touch on the importance in these challenging times for the design of appropriate policies. throughout the global crisis, we have all striven to avoid a repeat of the economic policy disasters of the 1930s – and to foster a close cooperation between policymakers around the world. working together towards a common goal must continue to guide our actions. today, i would like to put some of the key issues into a broader context. first, i will focus on the experience of economic and monetary union in europe. second, i will briefly describe the origins and impact of the financial crisis and outline how the european central bank ( ecb ) has responded to the crisis. and finally, i will touch on the current economic situation and conclude with the key challenges that lie ahead of us in achieving an effective economic governance policy in europe. price stability in the euro area let me begin with price developments. the quality of a currency is reflected in its value. as you know, this is what in german is called geldwertstabilitat. there is one single benchmark to measure such stability within an economy and that is the degree of price stability or, expressed the other way around, the rate of inflation. as the guardian of price stability for the euro area, the ecb has set itself a very clear numerical benchmark to measure the degree of price stability. it has defined price stability to be an annual rate of inflation of consumer prices in the euro area of below, but close to 2 %, over the medium term – that is, over an average of several years. we now have almost 12 years of experience with the euro – enough time to judge whether the ecb has been successful in delivering its mandate. over these 12 years, the

willem f duisenberg : the euro area - recent developments and the economic outlook opening remarks by dr willem f duisenberg, president of the european central bank, of the panel on " recent developments in the world economy " at the 2nd international conference organised by the banco de mexico, mexico city, 12 november 2002. * * * ladies and gentlemen, it gives me great pleasure to chair this panel today and to speak before such a distinguished audience. in my opening remarks, i will briefly touch on recent economic developments in the euro area and on our assessment of current developments in the economic outlook. although, earlier this year, we were expecting a relatively pronounced economic recovery in the euro area, since the summer it has become increasingly clear that this scenario of rapid acceleration will not materialise. over recent months, a high degree of uncertainty - stemming mainly from developments in stock markets and geopolitical tensions - has taken its toll on confidence worldwide. these developments have weakened the pace of growth in the euro area. recent data and information suggest that activity in the euro area has continued to grow only moderately in the third quarter of 2002 and available evidence also points to only moderate rates of growth of real gdp at the turn of the year. still, for the time being, the main scenario for the euro area remains that economic growth is expected to return to rates close to potential in the course of 2003. this expectation is consistent with all available forecasts by international organisations and by leading private forecasters. moreover, financial markets have shown signs of stabilisation in recent weeks following a period of considerable turbulence. the expectation of an improvement in economic activity in the euro area is contingent on a recovery of growth in private consumption, which should be supported by growth in real disposable income and a correction of high perceived inflation rates towards those of actual rates, which are lower. this expectation is also conditional on a projected gradual recovery in foreign demand in line with expected stronger growth in the world economy which, together with low interest rates, should lead to a resumption of stock building and stronger investment. however, this main scenario is still surrounded by considerable uncertainty, and it is difficult to determine precisely both the strength and the timing of the economic upswing in the euro area and globally. turning to price developments, euro area inflation is currently slightly above 2 %, the upper limit of our definition of price stability. annual headline inflation rates in the euro area are likely to remain above 2 % for the remainder of 2002 and