some time. after all, the sovereign debt crisis was not least the result of a slow but steady loss of price competitiveness in some countries in the euro area. the loss of competitiveness went hand in hand with a build - up of excessive foreign indebtedness – partly due to high public deficits and partly due to high deficits in the private sector. 1 / 5 bis central bankers'speeches when the markets began to doubt that these debts could be repaid, they pulled the plug. some countries in the euro area were effectively shut off from the capital markets. in countries where the reason for the sudden stop was not already a fiscal crisis, it soon became one as sovereigns struggled to rescue their banking systems. to regain the trust of the markets, the affected countries had to undertake reforms to regain competitiveness. but regaining competitiveness takes time. time that these countries did not have. the situation was calmed down after the member states of the euro area hastily tailored a rescue fund which has now become a permanent institution, the european stability mechanism. the euro system – i. e. the ecb and the national central banks of the 19 member states of the euro area – also needed to take measures to prevent the crisis from escalating. these included targeted purchases of bonds from member states with poor credit ratings. some of these measures not only proved controversial within the ecb governing council, but also raised a number of fundamental questions about the limits of monetary policy. these emergency measures bought the countries time to restore their competitiveness and to consolidate their public finances. most of the former crisis countries have indeed managed to reduce or even eliminate their current account deficits. but the wage restraint that was necessary to improve price competitiveness together with the ongoing efforts to consolidate public finances have dampened growth and price pressures in the euro area. this is one of the reasons why the recovery after the financial crisis took somewhat longer in the euro area than in other advanced economies, such as the united states and the united kingdom. but for some time now, the recovery in the euro area has become increasingly robust and broadbased. real gdp has been growing now for 16 quarters. and what is probably equally important, almost all countries are sharing in the recovery. there has recently been an improvement in growth in france, italy and spain, for example. this means that growth in the large euro area countries is no longer diverging. the economic outlook has improved, too. the european central bank, for example

a single market in financial services, barriers must be removed. mainly, this consists of a great deal of harmonization. the current crisis also demonstrates the importance what the imf has been underlining for quite a while : that regulatory and supervisory structures must follow the reality of the financial markets. as national financial institutions merge into multinationals, financial supervision must follow. there is a lot of work ongoing in this regard, and the financial crisis has given this work new impetus. as i said, the eurosystem is agnostic about the international role of the euro. global usage of the euro is not policy goal. that said, the euro does have several strengths as an international currency. there is also work under way, aimed at improving the single market, that should, as a byproduct, make it an even stronger contender. the us dollar is not likely to lose its dominating role any time soon. but partly because of the ongoing crisis, partly due to progress in financial integration and structural reform in the euro area, it looks likely that the no. 2 position of the euro could well be growing stronger in the coming years.