done in a manner that is consistent and stable over time and homogeneous across countries. the procedures must not be vulnerable to political cycles, as stated by the ecofin council. countries should consider the quality and integrity of their statistics as a matter of priority. 2. the need for structural reform in the euro area let me now turn to the lisbon agenda. the european council intended to reinforce the process of structural reforms as from 2000 onwards. however, almost five years later, the european programme to become “ the most competitive and dynamic knowledge - based economy in the world [.. ] by 2010 ” has not been implemented as promised. in this regard, the recent report by the high level group chaired by wim kok, which provides an independent assessment of the lisbon strategy and contributes to next year ’ s mid - term review of the strategy, expresses an urgent call for renewed impetus. it proposes a stronger commitment of national governments and a sharpening of the lisbon strategy ’ s focus by placing particular emphasis on the acceleration of employment and productivity growth “ via a wide range of reform policies as well as a wider macroeconomic framework as supportive as possible of growth, demand and employment. ” the ecb welcomes the conclusions of the high level group as well as the subsequent ecofin reaction, which is also supportive. concerning the role of macroeconomic policies in fostering the success of the lisbon process, i would like to stress that an independent monetary policy aimed at delivering price stability and being credible in that delivery over the medium and long term, together with a fiscal policy in compliance with the stability and growth pact to maintain fiscal sustainability, are the best contributions that macroeconomic policies can make to facilitate the implementation of reforms. price stability is a necessary condition for being effective in fostering sustainable growth as well as of supporting employment and social cohesion, thus supporting the lisbon objectives which, in turn, are another necessary condition for enhancing growth and job creation. consequently, as was concluded by the ecofin council in its first reaction to the kok report, the macroeconomic framework needs to be supportive of stability and growth. as for increasing the incentives to implement reforms, the ecb has in the past pointed to the supportive role of a more transparent and effective benchmarking based on sensibly defined quantitative indicators. apart from creating peer pressure and accountability on the side of policymakers, benchmarking can be a crucial driver of public discussion in the eu, raising public awareness about the benefits all european citizens could derive in

policy to all parts of the monetary union and is therefore in full compliance with the prohibition of monetary financing. also, we sterilise the impact of the smp on our total liquidity provision. the relative size of the programme, representing just 1. 6 % of the euro area gdp against 13. 7 % of gdp that has been bought by the bank of england or the 11. 4 % purchased by the federal reserve, makes it easier to implement. the ecb continues to comply strictly to its mandate to ensure price stability and does not allow inflation to increase as a way of easing the burden of the debt. on this point we disagree with from some of the suggestions made recently by professor rogoff. the inflation tax is a blunt tool whose accidental effects would reflect mainly ex - ante institutional features ( such as the degree of indexation or the maturity structure of liabilities ) rather than the actual necessity to adjust. more importantly, professor rogoff has said himself, inflating the debt away would unduly jeopardise the most precious capital of the ecb and of any independent central bank, namely its credibility. the ecb will never debase the currency, as our record shows : we have remarkably preserved both internal and external value of the euro by keeping inflation low and inflation expectations well - anchored. as we have learnt and repeatedly experienced, credibility and in particular the ability to anchor inflation expectations are crucial for the smooth functioning of monetary policy. their key role has been highlighted again and again during the financial crisis, particularly in preventing the danger of an entrenchment of deflationary expectations. the euro area is a highly integrated economic and financial area which needs to be managed through common decisions. however, aside from monetary policy, it lacks powerful decision - making institutions. this means that rules - based frameworks must act a substitute for centralised authority. for fiscal and economic issues, a unitary state would have a finance ministry which both defines and vetoes fiscal and broader economic policies. emu must achieve the same effect through its economic governance framework. we know from bis central bankers ’ speeches research, including some by professor rogoff, also corroborated by experience, that softrules will not achieve the desired outcome. strengthening the rules governing fiscal and broader macroeconomic policies is thus essential. the stability and growth pact ( sgp ), which was created to discipline fiscal policy, has not worked well and is now being strengthened and complemented by