the euro area than is needed to finance non - inflationary growth. at present, it is not clear how this excess liquidity will be used in the future. if significant parts of these liquid holdings were to be transformed into transaction balances, particularly at a time when confidence and economic activity were strengthening, inflationary risks would rise. in addition, high excess liquidity and strong credit growth could become a source for strong asset price increases. to sum up, while the economic analysis indicates that prospects are consistent with price stability being maintained over the medium term, a number of upside risks need to be carefully monitored. cross - checking with the monetary analysis also supports the case for strong vigilance with regard to the materialisation of risks to price stability. as regards fiscal policy, first data for 2004 indicate that most euro area countries are likely to miss the original budgetary targets set in their updated stability programmes. in some cases, countries seem to have based their programmes on overly optimistic assumptions for economic developments. in addition, some countries have been implementing fewer consolidation measures than originally planned. as a consequence, the aggregate fiscal balance for the euro area is not likely to improve in 2004. progress in fiscal consolidation needs to be prioritised and should be part of a comprehensive and growth - friendly reform agenda. the governing council remains convinced that there was and there is no need for changes to the text of the treaty and of the stability and growth pact. the pact is an appropriate framework for dealing with countries ’ fiscal developments on a level playing - field. at the same time, we consider that improvements could be introduced in the implementation of the pact. in line with the broad economic policy guidelines, macroeconomic policies need to be oriented towards growth and stability in the euro area. this also requires sustained efforts to increase the flexibility of labour and product markets in the euro area. in this respect, several governments in the euro area have taken courageous steps over recent months. it is important that the reform momentum is maintained, taking advantage of the economic recovery. this will not only increase overall economic efficiency and enhance longer - term growth prospects in the euro area, but will also strengthen the basis for a sustained economic upswing in the euro area. we are now at your disposal for questions.

paul jenkins : beyond recovery – sustaining economic growth remarks by mr paul jenkins, senior deputy governor of the bank of canada, to the economic club of canada, toronto, 29 march 2010. * * * good afternoon. it is a pleasure to be here. john maynard keynes said the objective of “ analysis is … to provide ourselves with an organized and orderly method of thinking out particular problems. … this is the nature of economic thinking. ” 1 this is very much the tradition of the economic club of canada, which offers an important forum for analysis and discussion of economic issues, certainly those we have had to address since the onset of the global financial crisis. the bank of canada has offered its analysis and perspective on these issues, especially global and domestic developments, the policy actions needed to address the situation, and how best to position the canadian economy to the benefit of all canadians over the medium - to - longer term. in the wake of the global financial crisis and the “ great recession ”, economic recovery is under way, supported by exceptional monetary and fiscal stimulus. in many countries, however, large output gaps remain and, given the need to repair the balance sheets of households and financial institutions in these countries, the return to full resource utilization will be protracted. what i ’ d like to discuss today is the economic environment beyond recovery. i ’ ll set the stage by discussing, in general terms, the kind of global economic landscape we ’ re likely to see five to ten years ahead. then i ’ ll look at several important areas of public policy that will help to shape that outcome and promote sustained economic growth. finally, i ’ ll focus on some of the challenges and opportunities that a significantly different global economic landscape will pose for canadian business. a changing global economic landscape the global economic landscape will change considerably over the coming decade. to get a sense of what it may look like, it ’ s useful to consider both the developments that are required for global economic growth to be sustained, and the likely impact of the powerful trends that have been shaping, and will continue to shape, the world economy. it is clear that, as a nation, americans need to save more and rebuild household sector wealth. for too long, the u. s. economy has been consuming more than it has been producing. this means that, in the future, more u. s. economic growth must come from net exports – a combination of higher exports and lower imports. consumer demand will be a relatively less important source of growth