in international payments linked to the recession, the recovery is broadening imbalances again. china ’ s current account surplus, in particular, is expected to increase again. the accumulation of international reserves by many developing countries, particularly those in asia, is continuing. the mechanisms that fuelled the destabilising financial flows before the crisis are reappearing. in emerging countries there is a substantial capital inflow, which is not, however, finding an equivalent outlet in domestic investment and consumption ; it is thus being recycled to the developed countries. the economic performance in developing countries should encourage them to tighten domestic monetary conditions and sever their ties with the policies of the developed countries, deriving from the fixed or semi - fixed exchange rate regime. the fear of letting the exchange rate appreciate, so as not to damage the sector exposed to international competition, leads to an overheating of economic activity that may inflate a bubble not unlike the pre - crisis one in developed countries. the risk is that, by maintaining the currency link with the developed countries, the emerging countries import financial instability. the accumulation of international reserves can offer a partial protective buffer, but it won ’ t necessarily be sufficient to avoid the repercussions on the real economy. europe and the united states would both benefit from a better functioning world economy, but they depend on decisions taken by other g20 countries. the rigidity of the chinese monetary regime is slowing down the adjustment of relative competitiveness and the recovery of the developed countries. in this area, europe and the us have common interests, and are more likely to succeed if they pursue them in a joint and coordinated strategy. the experience of recent years shows that separate action is unlikely to succeed. however, the cooperative mechanisms developed within the g20 are still at an embryonic stage. not all countries are willing to openly discuss their economic policies, accepting critical comments, as happened within the g7. some issues are neither discussed nor mentioned in communiques if views are not unanimous. this limits the capacity for self - examination and peer pressure, which has been the basis of international cooperation. there is a risk that, once the crisis has passed, the pressure on g20 countries to develop an open method of cooperation, geared to the challenges of our times, may fade away. if this occurs, it will confront europeans and americans with a new dilemma on the way towards global economic relations. but one thing is certain : whatever form the international cooperation takes, the us

gertrude tumpel - gugerell : start of the ecb / escb needs analysis programme in belgrade introductory statement by ms gertrude tumpel - gugerell, member of the executive board and of the governing council of the european central bank, at the press conference on the occasion of the signing of the protocol between the european central bank, the national bank of serbia, the european agency for reconstruction and the delegation of the european commission to the republic of serbia, belgrade, 1 september 2008. * * * mr radovan jelasic, governor of the national bank of serbia, mr ambassador lloveras, head of delegation of the delegation of the european commission to the republic of serbia, mr daniel giuglaris, head of the belgrade operational centre of the european agency for reconstruction, ladies and gentlemen, it is a pleasure for me to be here in belgrade today to mark the start of a programme that – i hope – will further the european integration project in the area of central banking. i would like to express my gratitude to the european agency for reconstruction and to the delegation of the european commission to the republic of serbia for supporting this programme, in which the european central bank ( ecb ) and 17 central banks of eu member states will be working closely with our colleagues at the national bank of serbia ( nbs ). speaking also on behalf of our central bank partners, i would like to say that we are very much looking forward to these coming nine months. later during this press conference i will confirm the commitment of the ecb and our partner national central banks to implementing the programme by signing a protocol which confirms the common goals of all stakeholders in the programme. the ecb and our partners in the european system of central banks have an interest in developments in serbia and in the western balkans in general ; these countries form what we call our neighbouring region. we share a common destiny with all of you, and we are being confronted with common challenges, for instance in the pursuit of monetary and financial stability. in order to achieve our common mandates of low inflation and stable financial sectors we need to make sure that some prerequisites are met, most importantly in terms of the complete independence of the central bank from political instructions, in order to permit a firm stability - oriented course of monetary policy. we also know that stability - oriented monetary policies need to be accompanied by coherent policy - making in other economic areas, above all in fiscal policy. this is universally true, in belgrade and