in the field of retail payments, the degree of the eurosystem ’ s central banks ’ operational involvement varies across countries. most central banks provide payment services to public institutions. some central banks also offer processing facilities to commercial banks by participating in private retail payment systems and / or operating an own retail payment system. the completion of the sepa project calls for a specific effort of those central banks that are significantly involved in retail payment operations. they should lead by example, notably by supplying the new european payment instruments to their clients and by ensuring that the retail payment system they operate complies with the interoperability principle enshrined in the sepa project. 2. 2. acting as a facilitator of market and regulatory evolutions turning to the involvement of the eurosystem in payment systems issues as a facilitator of market and regulatory evolutions, it is fair to say that this mode of action has been mainly used in the field of retail payments to support the sepa project. the sepa project was launched in 2002 by the european banking community under the aegis of the eurosystem and the european commission. the banking industry has taken on the responsibility of delivering the sepa products, in particular the specifications of the new european instruments. the european commission, which grants a great importance to the sepa project in so far as the latter contributes to the achievement of the common market and the completion of the lisbon agenda, has elaborated a legal framework for payment services in the european union. it made public, in december 2005, a directive proposal that should be adopted at the european level before being transposed in national laws by 2008. since 1999, the eurosystem ’ s central banks have been actively promoting, at european and national levels, the establishment of a sepa. they proposed a vision which is now shared by all stakeholders, contributed to a constructive review of the banking community ’ s deliverables and cooperated with the european commission to address legal and regulatory impediments. while the design phase of the sepa project is almost completed, the next challenge is to ensure that migration towards the sepa is well - organised and delivered. because the starting point in each country is different, migration plans to the sepa will primarily have to be organised locally. this should naturally lead to a further involvement of the eurosystem ’ s central banks at national level, at least to help co - ordinating the efforts of the wide range of stakeholders.

the founders of the euro had seen the problem and put in place the growth and stability pact. the principles were sound. the framework was adequate. the implementation has been extremely weak. bluntly speaking, peer pressure failed to ensure consistent and rigorous respect of the principles which had been agreed upon. it was, and remains necessary to make a “ quantum leap ” in economic governance. what did we do? the governments are now trying to address those deficiencies. significant progress has been made over the past year. at the national level, all member states have embarked upon credible public finance consolidation plans that are already bearing fruit. at the eu level, a new framework has been agreed upon. the first pillar is a strengthening of the sgp with a much stronger preventive arm. surveillance over budgetary policies has been reinforced with a more effective prevention / correction of excessive deficits. government debt levels are being better taken into account and sanctions will become more automatic. ideally those european disciplines should be now completed by the adoption, in each member states, of strong national fiscal rules. the second pillar is a new process to monitor competitiveness and, in particular, unit production costs. lastly, member states have agreed on a new euro area framework for crisis management. experience has shown the need to provide temporary financial support to ea member states facing impaired access to market financing, as you know, a new facility, the efsf, was created in may 2010 for a three year period. it has been used to support and finance the greek and irish programs. although nominally set at 440bn its effective lending capacity was in fact limited to 250bn, an amount which may have been insufficient to instill confidence in the markets. last march, an agreement was reached to raise that capacity to an effective 440 bn. member states also agreed on a permanent crisis management framework due to be implemented in 2013 and mainly based on a european stability mechanism ( esm ) with an effective lending capacity of eur 500 bn. that mechanism will have the possibility of bis central bankers ’ speeches exceptional interventions in sovereign debt primary markets. identical and standardized collective action clauses ( cacs ) will be included in all new euro area government securities, with maturity above one year, from july 2013. their basis will be consistent with the cacs that are common in new york and english laws. significantly, all those mechanisms associate the imf and the european commission “ in consultation ” with the ecb to avoid relying only on peer pressure between members states and ensure