to continue to deliver price stability in the years to come. our defence of our mandate will be just as resolute as it has been in the first 11 years of monetary union. a monetary policy that pursues short - term objectives is doomed to failure. however, this focus on the longer term means that those independent central banks also stand in contrast to the short - termism of the financial markets. the global financial crisis is also fundamentally a result of short - term thinking. challenges arising from the financial crisis the handling of the financial crisis and its economic consequences has been a great challenge for us all. governments and central banks have had to intervene on a massive scale in order to stabilise the financial system and the real economy. the monetary policy measures adopted by the eurosystem have allowed inflation expectations to be kept stable even during the crisis. from the very beginning, our interventions were designed in a way that allowed us to unwind them easily as soon as conditions improved. at no time did we lose sight of our price stability objective. countries ’ budget deficits have risen substantially on account of the crisis. rising debt levels do not just bring with them the potential for greater conflict between fiscal and monetary policy. above all, they also place a burden on the sustainability of public finances in the countries in question. it is therefore in the interests of each and every country to return to sound public finances as quickly as possible. in the current circumstances, where europe faces pivotal decisions, it is more important than ever to recognise that a prosperous union requires determined action by all. the most important issue is that europe ’ s policy - makers live up to their responsibilities. as i mentioned yesterday, the governing council of the european central bank has always stressed the need to preserve and reinforce peer surveillance inside the euro area, to strictly apply the treaty provisions and the stability and growth pact, and to have the best functioning possible of the commission and of the eurogroup. particularly as regards the government members of the eurogroup, the ecb ’ s governing council has always considered that it was important that they would, as a college, live up to their very important responsibilities as regards fiscal policies, the monitoring of relative competitiveness and structural reforms. i am therefore pleased that the heads of state and government of the euro area could work out a solution, implementing their earlier declaration to “ take determined and coordinated action, if needed … ”, which maintains the lead responsibility of european policy makers. monetary union in europe is far more

to correct them by way of risk reduction and risk sharing, both as regards the financial sector and as regards economic and fiscal policies. it is now up to political leaders to fill this road map with life. i am aware that at the moment much of the political attention lies elsewhere. but we should not forget that a stable and sound economy is a vital precondition to be able to tackle challenges in all other policy areas ; therefore, making emu function in the long run is not a luxury – it is a necessity for europe to flourish. thank you for your attention ; i am now looking forward to our debate. bis central bankers ’ speeches