jean - claude trichet : euro star event to raise public awareness and facilitate changeover to the euro in estonia speech by mr jean - claude trichet, president of the european central bank, at the euro star event at the bank of estonia, tallinn, 19 september 2010. * * * dear governor lipstok, ladies and gentlemen, the introduction of the euro is a historic moment for any eu member state, and the euro itself is also a historic achievement for europe. indeed, the euro is one of the most tangible signs of the cohesion and mutual trust, among europe ’ s citizens. since its introduction back in 1999, the depth of feeling generated by the euro has been remarkable. a lot of the attention gained by the euro has been directed not only at the currency itself, but rather at the underlying strategic vision, of which it has become the symbol. the forthcoming enlargement of the euro area to include estonia demonstrates that the euro area is not a “ closed shop ”. its doors are open to the eu member state that fulfils the necessary preconditions in a sustainable manner. 1 january 2011 will become a landmark in the history of estonia, reflecting the long and challenging process of economic and monetary integration that has enabled estonia to join the euro area. the euro banknotes and coins are now an important and natural part of our daily lives. and this will soon be the case for the people of estonia. in preparing for the changeover, we have enjoyed excellent cooperation with eesti pank and the estonian government, working very closely also with the european commission. and this, i am sure, will make the introduction of the euro in estonia a success. today, eesti pank and the european central bank are launching the euro campaign estonia 2011, an extensive media campaign to help the people of estonia to become acquainted with the euro banknotes and coins, the security features of the banknotes and the changeover modalities. the campaign comprises tv advertisements, print publications, public relations activities, interactive applications for the internet and special support for the media. in total, we have four tv spots that will be aired from november 2010 to mid - january 2011, and these form the backbone of our communications activities for the general public. the first tv spot sets the mood of the campaign and familiarises viewers with the appearance of the euro banknotes and shows the gates and bridges featured on the banknotes. the gates symbolise the spirit of openness and cooperation in europe.

same phillips curve analysis suggests that changes in inflation expectations play a major role in shaping inflation developments, anchoring inflation and potentially mitigating the harmful outcomes resulting from temporary shocks. in such a setting, expectations pin down the level of inflation in the long run, while changes in the output gap lead to short - run accelerations or decelerations of inflation around that level. there are many caveats to using a phillips curve framework to relate inflation developments to economic slack – for instance, measures of both inflation expectations and the output gap are subject to considerable uncertainty, non - linearities may arise, and the relationship may change over time. moreover, the actual impact of slowing real economic activity on inflation depends crucially on the nature of the economic downturn, the types of shock hitting the economy, their magnitude and duration. wage and price rigidities may also contribute to help to moderate inflationary responses to changing economic conditions in the short run. overall, the current weakness in real economic activity would be expected to dampen inflationary pressures in the euro area but not to lead to outright deflation. the approach underscores that while economic slack may contribute to movements of inflation in the short run, well - anchored inflation expectations are a crucial determinant in the inflation process. 2. inflation expectations inflation expectations cannot be observed directly, but approximate measures can be derived indirectly in three different ways : asking a sample of consumers, surveying professional forecasters and extracting information from financial markets. let me elaborate. the european commission conducts a poll every month in which it seeks consumers ’ opinions on inflation developments in the euro area, in particular their perceptions of current inflation developments and their expectations for the next 12 months. these two measures are plotted in chart 10, together with actual inflation. consumers ’ expectations have declined strongly in recent months, reaching a record low in may ( the survey started in 1985 ). most respondents thought that prices would either remain unchanged or fall in the next 12 months. but this is not really the same as expecting deflation. the second way of measuring inflation expectations is via the ecb ’ s survey of professional forecasters. it suggests that most respondents regard deflation as unlikely. in the second quarter of 2009, none of the 50 participants reported a negative point estimate for 2009, and two participants reported a point estimate below zero for 2010. together with point estimates, participants are also asked to assess the likelihood of future inflation falling within given ranges. averaging the individual responses provides a summary of their