in the euro area and, as jorg has said, expectations there have remained very well anchored. but as in japan, people in europe are talking about a lost decade. cœure : there is a risk of a lost decade in europe, if the right reforms are not undertaken. but the challenges and answers are very different from those in japan. it is true that the crisis has been a step backwards [ a setback ] for the european economy, but the underlying problems, such as declining trend growth and unsustainable social promises, were there before. the crisis has only uncovered them and has shown the need for answers more clearly and more urgently. but the high level of unemployment is certainly worrying … asmussen : yes, the level of unemployment is unacceptable. but the question is what we can do about it. we have a strategy in europe that is based on stable prices, sound fiscal policies bis central bankers ’ speeches and growth and employment - enhancing structural reforms. it will take some time to see the positive effects, but i don ’ t see any viable alternative. cœure : the high level of unemployment, particularly youth unemployment, shows the urgency of taking forward - looking reforms at the national level and, collectively, at the euro area level. with the crisis, differences between countries are becoming clearer and larger. is it a challenge for friendship between european nations? asmussen : we must acknowledge the resurgence of national stereotypes. that is worrying. the cliche that the greek people are lazy, whereas all germans are hard - working, is simply false … reality is more differentiated. cœure : we see the risk of nationalism in european discussions as well, with the temptation to defend narrow national interests. but politicians can overcome this temptation and make progress. take the banking union, for example. it is the most important step to be taken in european integration since the inception of the euro, perhaps more important than the single currency itself. it will have far - reaching consequences for national economic models and national legislation. so there is room for optimism if we succeed in taking that quantum leap forward. isn ’ t that overly optimistic? what can germany and france do to overcome these challenges? asmussen : you have described the challenges rightly, but the answer to them can only be more integration. france and germany have a leading role to play, because they stand at the core of european integration. they jointly, but only jointly, fulfil the definition of a superpower : if

many observers doubt that this is possible, especially within a short period of time. we are convinced that the three components will have a sizeable effect on our balance sheet – with the consequences i have described. we expect the most significant effect to come from the tltros. this is also why we again cut interest rates. there had been rumors that banks might not come to the first tltros because they were speculating that interest rates could be cut later. this is now off the table. does that also mean the smaller the tltros uptake, the bigger the purchase programs will be? this is not necessarily the case. but again : we believe that this new facility is very attractive. so banks are well advised not to miss this opportunity. and if everything else fails the ecb will start buying government bonds? this option of a broad based quantitative easing ( qe ) was already discussed in the governing council, but it did not happen already this time. does that mean there is no “ comfortable majority ” for this step – like for the others which were announced last week? there was no proposal for doing qe at this meeting. qe was discussed, but it was not on the table for a decision. so i don ’ t think you could draw this conclusion. so qe, including the purchase of government bonds, would be the next logical step for the governing council? we are convinced that we are allowed to buy government bonds in the secondary market, if it is justified by monetary policy considerations. but we also know what it means and this is certainly something we would prefer not to be forced to do. we hope that the recent package will be enough. but in view of our responsibility and our mandate, buying government bonds certainly is something we cannot exclude. but this would lead to even more dissent within the governing council. last week ’ s decision was not unanimous – although it is always stressed that the governing council is unanimous in its commitment to do what is necessary against the risks of low inflation. this phrase does not mean that in a particular moment everybody has to agree to a concrete package. the most significant thing about this phrase – which was decided upon unanimously – is that no unconventional instrument is a priori excluded. but calibration and timing can occasionally be a source of discussion. but with the most recent decision the consensus decision - making is ultimately history now? since 2010, we have had some decisions which were not taken unanimously. in such difficult times, there