have proven their value. and just as that is true at the level of individual regions, it is also true for europe as a whole. a dynamic and innovative europe today, europe is on the road to recovery, but the pandemic has led to shifts in the global environment and within our economies. globally, the economy is likely to become less predictable. new powers are emerging, while the trend toward protectionism is not abating. and disruptions from climate change are bound to become more common. at home, we still face the challenge of exiting the pandemic safely, while also preparing for the transformation of our economies to a greener and more digital growth model – a transformation that is not only desirable, but now inevitable and in which the innovative power of businesses will be a driving force. in rising to these challenges, we need to find ways of adapting to the post - pandemic world and supporting innovation potential. europe ’ s capacity to adapt is already being shaped by our collective response to the pandemic, in two ways. 2 / 4 bis central bankers'speeches first, thanks to the exceptional response of fiscal and monetary policy, we are seeing a very fast economic recovery rather than a slow and painful one. we are going through the steepest bounce - back in growth in the euro area since 1975. we expect gdp to be back at its prepandemic level before the end of this year. but we need to manage very carefully the reopening of the economy and the frictions it is creating. we are seeing rising energy prices and supply chain disruptions. as i mentioned recently4, we expect these frictions to be largely transitory. but it is hard to predict exactly how long disruptions will last. we should not overreact to supply shortages or rising energy prices, as our monetary policy cannot directly affect those phenomena. but we will pay close attention to wage developments and inflation expectations to ensure that inflation expectations are anchored at 2 %. the second way in which europe ’ s capacity to adapt has been strengthened is through the dedicated budgetary response at the eu level – the next generation eu ( ngeu ) fund. while temporary, the eu now has an ideal tool in place to support the transition towards the sectors and activities of the future. around 40 percent of these european funds will be spent on investing in the green transition and 20 percent on digitalisation. and these funds will only be disbursed in return for growth - enhancing reforms

swiss economy has been doing better than its neighbouring countries in terms of growth and employment, and also in terms of price stability. obviously, the fact that we are not a member of the european union is not an obstacle to our development. • switzerland is increasingly becoming a service - producing country. the flagship of our service industry is the financial sector, which expanded markedly in the 90s and now accounts for 15 % of our gdp – more than the machine tool industry and the chemical industry together. the number of banks, however, was reduced by half during that period and the number of bank employees remained stable despite expanding financial activities. these figures show that our financial industry has been eager to react swiftly to the challenges posed by globalisation. • switzerland has a solid balance of payments position. thanks to a large excess of savings over domestic investment, our current account surplus is constant and substantial. contrary to popular belief, my country is not an importer of capital, but a net capital exporter. our current account surplus represents 14 % of our gdp, a level which can only be compared to that of some asian countries. in recent years, our surplus in absolute terms was even larger than the surplus of the euro zone as a whole. • switzerland is well - known for its stable monetary framework. average inflation over the last 20 years amounted to 1. 8 %. we never went through monetary reforms as many european countries did in the past few decades. in fact, we still use the coins put into circulation in 1850, when the swiss franc was created. there is no better proof of monetary stability. • switzerland enjoys the lowest interest rate level in europe. this situation has nothing to do with the appeal of our bank secrecy, as many believe, but with the abundance of savings 1 / 3 and the high degree of price stability. since the introduction of the euro in 1999, the average interest rate on three - month euro deposits has been 3 %, while the three - month swiss franc rate has been 1. 4 %. if we assume a difference of about 1 % in the expected level of inflation between the euro area and switzerland, the swiss real interest rate advantage accounts for 60 basis points. • switzerland is also a firm believer in flexible exchange rates. our monetary regime has been unchanged since 1973, when the peg to the us dollar was removed. today, the swiss franc is freely determined by market forces. our last foreign exchange intervention dates back to 1995 – and that was a coordinated action in