while managing as far as possible its costs. not all countries that had joined the single market also joined the euro, of course. some countries, such as denmark, pegged their exchange rates to the euro. for other countries, the single market represented the gateway to the euro. five additional countries10 joined the euro in its first decade and three more in its second, but other smaller economies have stayed out so far. finally, there is the united kingdom, the only large economy inside the single market that chose to stay out of the euro area. the united kingdom is a particular case, not only for political reasons but also for structural reasons, such as the relatively low exchange rate pass - through it 3 / 10 bis central bankers'speeches had in the past. 11 the benefits of one market, one money today we should consider what gains have been made as a result of having one market with one money. with the euro protecting the single market, trade growth has increased, with intra - eu exports rising from 13 % of eu gdp in 1992 to 20 % today. intra - euro area trade has risen both in absolute terms and as a share of total trade with advanced economies12, even as emerging market economies have entered the global market. foreign direct investment ( fdi ) flows within europe have also grown13, with inflows from the rest of the eu to italy increasing by 36 % from 1992 to 2010. 14 behind the growth of intra - eu trade lies perhaps an even more important development, which is the much closer intertwining of european economies through the deepening of value chains. since the start of the 2000s, supply chain linkages between countries within the eu have intensified at a faster pace and were more resilient during the crisis, compared with their supply chain linkages with countries outside the single market. 15 the removal of customs barriers as part of the single market agenda has facilitated multiple border crossings during the production process. europe - wide standards have boosted intra - eu value chains by providing more certainty for firms about the quality of production in other countries and encouraging the fragmentation of the production process that is typical of value chains. 16 and the single currency has further enhanced the process by eliminating the costs of foreign exchange payments and settlements and of hedging exchange rate risk. participation in these value chains has brought gains for all countries, especially in terms of productivity spillovers. the imported inputs used in value chains generate a tangible boost to productivity. 17 and higher productivity in turn leads

up the price at which we need to pay. liquidity conditions are expected to become more challenging in certain market segments the longer the purchasing programme remains active. as such, we have to be mindful not to exert an undue influence on price formation. another potential complication relates to our public sector purchases. a key safeguard that we have set up for these purchases is to operate so - called “ blackout periods ”, where we do not buy around the date of a new issuance. this facilitates price formation and ensures that article 123 of the treaty is fully respected – the monetary financing prohibition. mindful of self - imposed constraints in this respect the remaining space for both net and gross purchases will largely be in newly issued bonds. this poses some potential complications that we have to monitor very closely. conclusion let me conclude. the recovery in the euro area continues at a robust pace, employment has risen strongly. both wages and underlying inflation appear to have turned the corner. at its october meeting, the governing council chose to reduce the rate of net asset purchases, which, as i have explained today, prevented an unwarranted increase in monetary stimulus. we will continue to monitor developments in the economy and set policy in a way that is consistent with our price stability mandate. in doing so, we must also take into account the balance of risks when setting policy. if we withdraw our monetary policy stimulus too early and too fast, asset prices could drop and yields rise sharply, with negative spill - over effects to the economy. at the same time, we have to be mindful, as our asset purchase programme continues, that the risks attached to it may increase the longer it lasts. nourishing a market belief that the exit might be permanently postponed could exacerbate the potential cliff effects. a credible perspective on exit is needed to keep these risks contained. a sense of proportion will therefore be crucial in managing the qexit. 1 see, e. g., gordon, r. ( 2016 ), the rise and fall of american growth : the u. s. standard of living since the civil war, princeton university press. it is worth noting that others contest the slowdown, arguing it relates to measurement error, e. g. brynjolfsson, e. and a. mcafee ( 2011 ), race against the machine : how the digital revolution is accelerating innovation, driving productivity, and irreversibly transforming employment and the economy, digital frontier press. 2