lucas papademos : the euro and economic growth speech by mr lucas papademos, vice president of the european central bank, at the forum des idees economiques, sciences po, paris, 15 april 2005. * * * the euro and the single european monetary policy are now more than six years old. there are many issues that can be addressed concerning the consequences of the euro. in line with the focus of our session, i will concentrate on some key questions concerning the performance of the euro and its role in promoting growth. • has the euro performed well and met the expectations of the european public? • has the european central bank conducted the single monetary policy effectively and fulfilled its mandate? • has the overall performance of the euro area economy and of its individual member states been satisfactory over the past six years? and, if not, what can be done about it? the performance and value of a currency must fundamentally be judged in terms of its purchasing power. consequently, it is the primary objective of the european central bank to safeguard the purchasing power of the euro by maintaining price stability in the euro area – which we have defined as maintaining inflation at close to but below 2 % over the medium term. the statistics speak for themselves. in the first six years ( 1999 - 2004 ) following the introduction of the euro, average annual inflation in the euro area was 2. 0 %. this is a remarkable accomplishment, particularly if we take into account that during this period the euro area economy was subject to a large number of adverse shocks that caused inflation to rise temporarily above 2 % for fairly long periods of time. these inflationary disturbances included oil price shocks, increases in food prices resulting from livestock epidemics, indirect tax increases and the undesirable effects on prices from the cash changeover to the euro. in spite of these sizeable adverse shocks, today we live in an environment of low inflation. the benefits of price stability are fully appreciated by the european public. for the citizens of a number of eu countries, the environment of low inflation should represent a marked change : after all, in the ten years preceding the introduction of the euro ( 1989 - 1999 ), average annual inflation in the 12 countries today forming the euro area was 8 %. what is more significant for the value of the euro and the credibility of the ecb ’ s single monetary policy is that long - term inflation expectations clearly suggest that financial markets are confident that price stability will be maintained in the euro area over the

christine lagarde : interview with france 2 interview with ms christine lagarde, president of the european central bank, conducted by mr jean - paul chapel and broadcast on 24 january 2020. * * * good morning, christine lagarde. this is your first television interview in france since taking up your new position at the european central bank in november. thank you for giving it to france 2 and telematin. french people knew you as the minister of economy and then as managing director of the international monetary fund ( imf ). and now, as head of the ecb, you have an even more powerful role and the financial markets scrutinise everything you say. do you have to weigh every word? you have to speak sparingly enough for your message to remain solid and credible. and central bankers obviously have to be careful in sending out signals because financial markets and analysts are watching and will draw certain conclusions in order to decipher what they should focus their efforts on and where they should move their funds to. let me briefly touch on france. today is a day of strikes in protest against the pension reform which will be presented to the cabinet today. are you in favour of this pension reform? at the moment i am not in a position to assess the structure of the text. in terms of price stability, of the main economic indicators, we know it ’ s important for each and every citizen to have enough certainty as to what will happen when they retire in 10, 15 or 20 years ’ time. so any reform that helps bring about that certainty and clarifies the future retirement landscape, and which does not generate any inequality, will be good for economic policy and for monetary policy. and that applies to all products involving future payment or returns. turning to monetary policy now, to the interest rates that are set by the ecb. these interest rates are persistently low, practically zero. so europeans are earning next to nothing on their savings. in france, the interest rate on the livret a is 0. 5 % and the return on life insurance is not much better. inflation is eroding the savings of those on the lowest incomes. that ’ s true. both rates need to be seen in parallel : the rate of return and the rate of inflation. above all, we need to ask why the rates are low. we are in an environment, in europe but also in all of the advanced economies, where the rates are generally low and have fallen