changes and structural breaks on asset prices. from a policy perspective, enhancing our knowledge about the role of risk aversion and amplification mechanisms in explaining the build - up and unravelling of crises provides important insight on how to conduct monetary and financial stability policy. fiscal policy and the euro area sovereign debt crisis the last theme of the conference that i would like to mention is the effect of fiscal policies and the evolution of the sovereign debt crisis in the euro area. by using a suitable nonlinear model, born et al ( 2014 ) show that the effects of fiscal consolidations on the cost of servicing sovereign debt depend crucially on the degree of fiscal stress. 6 while expenditure - based fiscal consolidations carried out in normal fiscal circumstances have favourable effects on the cost of servicing debt, in situations of fiscal stress, sovereign spreads tend to rise. these findings suggest that fiscal policies in the euro area should be oriented towards a growth - friendly composition. as pointed out by the ecb president in his 2014 jackson hole speech, selective tax cuts should be matched by corresponding selective spending reductions, targeting taxes with high fiscal multipliers and unproductive expenditures. additional benefits could be reaped by implementing strong co - ordination among fiscal policies of the different euro area countries, with an active role for complementary actions at the eu level with public investment. another important concern for the ecb has been the possibility that self - fulfilling beliefs might lead to unsustainable sovereign debt dynamics and therefore precipitate a crisis. 7 as bacchetta et al ( 2014 ) show, a belief - driven crisis cannot be prevented by conventional monetary policy, unless the monetary authority is ready to generate very high inflation levels for a prolonged period. non - conventional policies – based on issuing monetary liabilities in the form of fiat money – could be used, but their effectiveness would be limited. either the central bank has a large amount of assets relative to the sovereign debt, or the zero lower bound has to bind for an unrealistically long time. hence, it seems legitimate to conclude that the effectiveness of policy actions in preventing self - fulfilling sovereign debt crises is subject to important qualifications. this is in line with the ecb announcement of the outright monetary transaction ( omt ) programme in august 2012, aimed at eliminating self - fulfilling beliefs of a euro area break - up. the omt programme announcement has been successful so far mainly because of its careful design. the programme is strictly conditional on adjustment programmes and structural reforms

battle of salamis against the persians led to an expansion of the democratic institutions already introduced by cleisthenes. in democratic athens, all citizens enjoyed equality before the law, as well as equality of vote and equal opportunity to assume political office. the population doubled during the years of pericles, with thousands of immigrants contributing to the demographic growth of athens. ancient greeks conducted free trade with almost every part of the then known world, from the black sea to sicily, right up to the pillars of hercules, in today's gibraltar, founding colonies along the way. this commercial activity allowed, at the same time, invaluable cultural exchanges. the athenians managed available capital according to demand and supply, even initiating large - scale public works when unemployment was high. they turned economic prosperity into a warm place for art, science and culture to bloom. on the antipode, ancient greece can also teach us lessons to be avoided : in particular, how the lack of unity, or division and rivalry, which was the case between ancient citystates, can bring about a devastating conflict such as the peloponnesian war, which crippled greek military strength, bringing the most culturally advanced greek city - state, athens, into decline. luckily, there stand monuments, like the acropolis you see outside, that remind us of all these and of some core developments in the history of democracy and human creativity, which first emerged at the time of pericles but remain valid and pertinent to this day. it is a miracle that we are able to behold such iconic monuments and be reminded of the values they represent, which are at the core of our contemporary european identity and shape what it means to be a european citizen today. 3 / 4 bis - central bankers'speeches speaking of what it means to be a european citizen today, i would like to say farewell to my dear colleague ignazio visco, since this is his last governing council meeting after twelve years at the helm of banca d'italia. with ignazio, we have travelled together a long journey in the last several years. during this journey, full of storms but also some sunny periods, we have appreciated his integrity, intellectual honesty, wisdom, judgement, common sense, diligence and positive attitude. he has remained a true european citizen, faithful to the euro, supporting it in its most difficult times. a central banker who believes that price stability, financial stability and full employment can coexist if the