were denied lionel messi just so that the other teams, including bayern munich, had a better chance of winning. would that be a sensible way to rebalance the competitiveness of europe ’ s top teams? in my view, we will gain nothing if we try to rebalance by actively shifting weights at both ends of the scale. a second point is this : a large proportion of the current account deficits and surpluses result from trade with countries outside the euro area. even if surplus countries expanded their imports, this would help their fellow euro - area countries to increase their exports only marginally. the latter must first offer something other euro - area countries would want to buy from them rather than from someone else. to achieve this, the deficit countries must take measures that unlock their potential to increase productivity and improve competitiveness. this would considerably reduce the cost of adjustment and the time it takes. the oecd and other organisations have for years been promoting a long list of reforms. these aim at making labour markets more flexible, opening up product markets and making the public sector more efficient. a number of reforms have already been announced and, in some instances, implemented in countries such as portugal, spain and italy. and we are already seeing some promising results, especially in ireland. but despite these first steps, there is still a long way to go. such an adjustment will initially place a huge burden on the people in deficit countries, even taking into account the extraordinary boom in the years prior to the crisis. but will the burden be too heavy to bear? a central fear is that of deflation. unless productivity growth increases miraculously, it is certainly true that prices and wages will have to fall in many cases. but we must not confuse such a one - time adjustment with full - fledged deflation. and we must acknowledge that surplus countries are already helping to ease the burden of adjustment. what are the rescue packages other than publicly guaranteed interim loans to facilitate the adjustment? another thing we should not forget is this : of course, surplus countries will eventually be affected as deficit countries adjust. not every country on earth can run a current account surplus – unless we trade with “ space aliens ” as paul krugman recently suggested. as the deficit countries import less and become more competitive exporters, surplus countries will run lower surpluses. the key issue is whether this happens as a result of market processes or as a result of efforts to fine - tune aggregate demand in the euro area. i would welcome

: in basel at the bank for international settlements, in the g7, and also at this week ’ s meeting of g20 ( gruppe der zwanzig ) finance ministers and central bank governors in indonesia. over the coming days, this meeting will focus on climate change, in particular, but also on the global debt situation. and, of course, the russian war of aggression on ukraine will be the elephant in the room. given that inflation rates have been more than four times the target of 2 % since may and have continued to increase to date, the governing council of the ecb ( european central bank ) has announced an interest rate reversal for the euro area for july. in june, the governing council therefore rightly decided to end net purchases under the app ( asset purchase programme ) on 1 july. furthermore, the governing council has announced its intention to raise the key ecb ( european central bank ) interest rates by 25 basis points at its july monetary policy meeting and the prospect of further interest rate increases going forward. the governing council expects a renewed tightening of monetary policy in september. it considers an interest rate move in excess of 25 basis points appropriate if the medium - term inflation outlook in the september projection is unchanged or worsens. and the governing council is also anticipating subsequent further interest rate rises. just how fast these can be implemented will ultimately depend on the assessment of the newly published data. in june, euro area inflation was again significantly higher than before, at 8. 6 % according to the flash estimate ( up from 8. 1 % in may ). as the inflation rate was also higher in june than most experts had expected, this means that the run of inflation surprises has continued to date. compared with may, the forecast error has widened further. this also heightens the risk that inflation will remain higher in the medium term. as the governing council of the ecb ( european central bank ), we are judged by our words and, above all, by our actions. we need to bring inflation back to our target in the medium term. at the press conference following the governing council meeting in early june, ms lagarde spoke of the eurosystem embarking on a journey. the ship has to steer a course toward 2 % inflation – giving more or less throttle, as the need arises. this will bring us back to the target inflation rate – not overnight, but in the medium term. this is something that the people of the euro area can count on.