measures to enhance the availability of collateral, were pivotal in preventing a disorderly process of lenders ’ deleveraging and a large - scale credit crunch. this action was instrumental in maintaining price stability. later in 2012, a renewed confidence crisis, in part reflecting unwarranted investor fears about the reversibility of the euro, caused a severe deterioration in financial markets. sovereign bond and bank lending rates in some countries increased dramatically, thereby impairing access to financing of the real economy. bis central bankers ’ speeches to safeguard the singleness of monetary policy and to ensure an effective transmission of the ecb ’ s policy intentions to the broad economy, in august, the governing council announced its readiness to undertake outright monetary transactions ( omt ). omts have proven to be an effective backstop against unfounded fears of reversibility. strict conditionality contains moral hazard on the side of governments. it ensures that they will adopt the reforms that are necessary to secure their solvency and to foster conditions of steady growth for their economies. as i said before, the repair of the transmission channel cannot be done by the central bank alone, governments need to do their part. let me therefore turn to the on - going adjustment in member states, and the euro area more generally. 2. the adjustment in the euro area during the past five years, a number of euro area countries have seen a significant correction of their external and domestic imbalances. in ireland, greece and portugal current account balances improved by more than 7 per cent of gdp between 2008 and 2012. a large part of this adjustment has been driven by a contraction in domestic demand, triggered by the unwinding of long accumulated unsustainable developments and by the cyclical downturn. at the same time, in ireland, spain and portugal export performance has been very strong compared with the pre - crisis period. this is a sign that a genuine structural correction is taking place and resources are being moved from the non - tradable sector to the production of traded goods. we have also seen some improvement in cost competitiveness, which has contributed to the external adjustment. between 2008 and 2012, in the three programme countries the cumulated unit labour cost growth was about 10pp below the euro area average. the adjustment has been mainly driven by an increase in average productivity, largely reflecting labour shedding, rather than by a reduction in nominal wages. the latter adjustment has been much more limited so far. this has contributed to increasing the

mario draghi : hearing of the committee on economic and monetary affairs of the european parliament introductory statement by mr mario draghi, president of the european central bank, at the econ committee of the european parliament, brussels, 28 january 2019. * * * mr chairman, honourable members of the economic and monetary affairs committee, ladies and gentlemen, it is a pleasure to be back at the european parliament and to appear before your committee. i am happy that you have chosen the euro project and its achievements over the past 20 years as the topic for our discussion today. i will start on the substance without further ado, discussing in turn the internal and external dimensions of the euro area. i will then argue that, building on what we have already achieved, our duty today is to continue to make progress in ensuring that all of the euro ’ s benefits are realised in full. the euro ’ s internal dimension the euro was introduced to deepen the single market and safeguard its integrity. it continued the european project of reducing cross - border barriers through common endeavours and common policies. it followed the spirit that was already imbued in the schuman declaration in 1950 : building europe “ through concrete achievements ”. as a result, our economies are now integrated to a point that was unimaginable not so long ago. the euro was designed to be a trusted and stable currency. and the euro has indeed provided two decades of price stability, thereby upholding people ’ s confidence in the value of their savings. stable prices also facilitated firm investment and the creation of new jobs. today, there are 20 million more europeans in employment than 20 years ago in the 19 countries that currently make up the euro area. and since the creation of the euro, the labour force participation rate has risen from 59 % to 67 %, its highest level ever. the two decades in which the euro has existed have been exceptional. the first decade was the culmination of a 30 - year period of macroeconomic stability, also known as the great moderation. inflation averaged close to 2 % and the ecb ensured price stability mainly by adjusting its key interest rates. the second decade produced the worst economic and financial crisis since the great depression. as i had the opportunity to discuss at length in my remarks at the parliament ’ s plenary debate two weeks ago, as a response to the crisis we had to deploy new instruments to safeguard the effectiveness of our monetary policy and stabilise the euro area economy. 1 thanks to