cost. they come not only at a financial cost ; they also come with a strict conditionality. this conditionality needs to give assurance to lenders, not only that they will be repaid but also that the borrower will be able to stand on its own feet over a multi - year horizon. in the case of greece, this will require courageous, recognisable and specific actions by the greek government that will lastingly and credibly consolidate the public budget. other countries in the union and elsewhere have gone through times that were no less difficult, and they have emerged from a determined adjustment stronger and more competitive than in the past. these countries have demonstrated that a clear u - turn in national policy governance is achievable. after making the turn, they have reaped large payoffs. i will not comment on the negotiations that are currently taking place in athens. they have to be concluded by a courageous, comprehensive and convincing multi - year programme. and i am confident as regards the results of these discussions between the greek government, the european commission, the ecb and the international monetary fund. let me add a word about germany and the current public debate here. i very much appreciated the invitation by finance minister schauble yesterday to speak with the floor leaders of all political parties represented in the bundestag. i said yesterday in berlin that i had found this meeting – in which jurgen stark and i could respond to all questions of our interlocutors – extremely important. my main message was that a fast parliamentary procedure was highly recommended in the present circumstances. what we need most at this time is a strong sense of direction. we need a sense of direction that can guide us on how we can emerge from these turbulent events and how we can return to the path of economic stability. in my view, this sense of direction can be provided in three steps : first, in the case of greece, a strong and credible programme, negotiated between the commission, the ecb, imf and the greek government. second, the support i have mentioned that will avoid the materialisation of financial risks for the euro area as a whole. and third, a giant step forward in our own framework of surveillance, peer pressure and policy adjustment within the monetary union. speaking in the presence of federal president kohler, who played such a decisive role in creating monetary union and in the presence of the former finance minister theo waigel, the father of the stability and growth pact,

jean - claude trichet : lessons from the crisis and steps towards economic stability keynote speech by mr jean - claude trichet, president of the european central bank ( ecb ), at the 9th munich economic summit, munich, 29 april 2010. * * * sehr geehrter herr bundesprasident, lieber horst kohler, sehr geehrter herr chrobog, sehr geehrter professor sinn, meine sehr verehrten damen und herren, ich danke den veranstaltern dieser konferenz recht herzlich fur die einladung. besonders dankbar bin ich fur die gelegenheit, im anschluss an meinen langjahrigen freund horst kohler sprechen zu durfen. wir sind uns uber einen langen zeitraum hinweg in verschiedenen positionen immer wieder begegnet und haben oft sehr eng zusammengearbeitet. it has always been an enormous pleasure to talk with him and to work with him. both of us were engaged in the negotiations of the maastricht treaty. that is where we met nearly twenty years ago. we were also heavily involved with the handling of the european monetary system crisis in 1992 / 93. i remember that episode very well. it was a defining moment not only for the monetary integration of europe. it remains in our memories as a vivid example of what close and friendly cooperation can do in very exceptional and demanding circumstances. in my remarks today i would first like to reflect on the lessons that i believe we can draw from today ’ s financial and economic crisis. in the second part, i will touch on the current situation, and describe the three key steps that i believe we need to take to return to the path of economic stability. lessons of the financial crisis the financial crisis has taught us painful lessons. it has revealed fundamental weaknesses in our global financial system. in the years that led up to the crisis, the european central bank was among those institutions that warned against the under - pricing of risk in financial markets. but the growing complexity of the global financial system and specifically its international linkages made it difficult to predict how and when developments would turn. with hindsight we know a great deal about the causes of the crisis. financial innovation led to the development of new instruments that were