can the ecb then do? in theory, it would then be the turn of fiscal policy. i ’ ll pass this question on to the national governments. consequently, budgetary policy must now be at the top of the agenda. it must be possible to use budgetary policy in the next cyclical downturn. the various economic policymakers must live up to their responsibilities and not simply rely on monetary policy. you were not always a supporter of the ecb ’ s current policy, especially the qe programme. why has your attitude changed? it has changed entirely in two respects. i can honestly say that the effectiveness of the programme has come as a surprise to me. if we had not started the qe programme, growth might have turned negative again. we would have had recessionary deflation in many parts of the euro area. that would have been devastating for the democracies of the euro area. i also warned about the risks that the programme could entail, but they have not materialised thus far. what we are seeing with property prices, for instance, is not a worry. the bis [ bank for international settlements ] also noted that recently. bis central bankers ’ speeches the bis referred to an uneasy calm. that ’ s why i would also say that we have to continue to monitor and follow developments. but there are no broad - based bubbles in the real estate and asset markets. and if there were? then we would have to adopt the measures and use the instruments which were necessary. but that is a national competence. the member states are responsible for financial stability. however, we have a coordination function at european level in order to prevent spillover effects and cushion external shocks. what should be done if bubbles do indeed form, a phenomenon which unfortunately cannot always be foreseen? monetary policy applies to the whole of the euro area and aims to maintain price stability. that also applies to our flexible liquidity - providing instruments. but if the bubble bursts, that ceases to work, and then more liquidity is needed again. we have standard and non - standard instruments ; both can be used. but i ’ ll say it again : financial stability is a matter for the national authorities. after all, bubbles initially occur at regional and national level. solving the problems at that level is also much more efficient. compared with national financial stability measures, monetary policy is a rather blunt weapon. now you are making the ecb ’ s monetary policy seem less important than it

that goes hand in hand with the structural reforms i ’ ve been talking about. then do away with the “ close to ”. 1. 5 % would also be ok. that ’ s precisely the strategy discussion that i mean. you don ’ t have a discussion like that during a crisis ; you have it afterwards. the definition of price stability must not be seen as a moving target. it is important to have an institution which sets objectives that the general public can understand. people are not concerned about price stability ; they are concerned about the very low interest rates. that ’ s what they are worried about. there are a number of countries which are still in the adjustment process and experiencing deflation. that also has to be borne in mind. which countries do you mean? greece has been in a deflationary recession for five years. but doesn ’ t the ecb conduct monetary policy for the whole of the euro area? yes, but this problem also existed in spain for a long time. and the euro area as a whole was threatened by this deflationary scenario. let ’ s go back to the ecb ’ s mandate for a moment. the low interest rates and regulation are significantly affecting the performance and strategies of banks and insurance companies. is the ecb allowed to do that? on the specific subject of regulation, the rules are not made by the ecb ; it just implements them. it was the g20 that drafted them. what concerns us in this context is the need for a level playing field. we in europe have established protectionism for banks which is no longer acceptable and is fragmenting europe. we need a level playing field in order to achieve the necessary adjustment. europe is still “ overbanked ”. further consolidation is necessary. let ’ s turn to the euro. isn ’ t the ecb also conducting an exchange rate policy? the euro is weak, and a number of ecb representatives have long made no secret of the fact that they welcome that. in some countries, exchange rate policies were pursued before the euro was introduced. the ecb has no exchange rate target. however, the exchange rate does have a major impact on inflation and growth. don ’ t you see a risk of competitive devaluation worldwide? in fact, the governor of the reserve bank of india recently said that there should be a discussion and an agreement on this issue. we have a legally binding mandate under the treaty on the functioning of the european union, which specifically states that