your conference today, he would slightly amend the opening line of his famous declaration in 1950 and say : " le systeme financiere europeene ne saurait etre sauvegardee sans des efforts createurs a la mesure des dangers qui la menacent ". or to put it in our common language, " europe's financial system cannot be safeguarded without the making of creative efforts proportionate to the dangers which threaten it ". our responsibility as leaders is to inspire and support those creative efforts as we meet the challenges in front of us. collectively and individually, we are responsible for the stewardship of our organisations so that they are fit for our successors. to paraphrase keynes, we need to disembarrass ourselves of short views and take wings into the future. one of my favourite poems is seamus heaney's beacons at bealtaine, a poem written to mark the eu's expansion nearly 20 years ago and which speaks, as heaney put it, " for our honour and dignity as europeans ". there's a line in it which for me captures a leader's role : move lips, move minds and make new meanings flare. 6 / 7 bis - central bankers'speeches diversity, connections, outcomes, ambition, and leadership. he tangata, he tangata, he tangata. move lips, move minds and make new meanings flare. 1 blinder, a. s., goodhart, c., wyplosz, c., hildebrand, p. and lipton, d., 2001. how do central banks talk?. centre for economic policy research. p66 2 nouriel roubini, megathreats, ( john murray, 2022 ) 3 https : / / european - union. europa. eu / principles - countries - history / history - eu / 1945 - 59 / schuman - declaration - may - 1950 _ fr 4 john maynard keynes, economic possibilities for our grandchildren, ( 1930 ) in essays in persuasion ( harcourt brace, 1932 ), 358 - 373 5 https : / / youtu. be / fzq8tanftxe 7 / 7 bis - central bankers'speeches

turnaround in inflation. the consumer price index is forecast to fall by around 4 per cent this year and to be broadly flat next year ( the hicp index, which does not include mortgage interest payments, is projected to fall by close to 1½ per cent this year with a further modest fall in 2010 ). while major initiatives have been taken to stabilise the financial sector, and i will comment on these shortly, we also need to restore stability in other areas and chart a path that will in time ensure a sustainable recovery in economic growth. in particular, the importance of reversing the deterioration in cost competitiveness and in fiscal imbalances cannot be overstated. with regard to competitiveness in recent years, economy - wide productivity gains have been very modest and labour cost increases have been relatively high compared with our main trading partners. this has led to a substantial erosion of the country ’ s competitiveness. this deterioration is now being addressed and many firms have taken action to reduce their costs, with a view to regaining competitiveness and protecting output and employment. while this has undoubtedly been painful, it nevertheless reflects encouraging evidence of the flexibility and realism that is needed if the economy is to maintain the maximum possible number of jobs in the short term while placing ireland in a favourable position to benefit from an eventual recovery in world demand. this type of flexibility must embrace all sectors of the economy. on the fiscal side, the deterioration in the public finances is a cause for serious concern. the government has agreed with the european commission to correct our excessive deficit position by 2013 and it is crucial that these targets are met. the government ’ s introduction of a public sector pension levy and the supplementary budget are steps that have been taken to this end. bringing the public finances back into balance is necessary to restore macroeconomic stability and to ensure international confidence in the economy on which, as a small open economy, we are so dependent. as the bulk of the fiscal problem is of a structural or underlying nature, a cyclical recovery in economic growth cannot be relied on to restore order to the public finances. experience, both here and overseas, suggests that the best way to restore fiscal balance is to place more emphasis on reducing expenditure rather than increasing taxation. therefore, while some broadening of the tax base is necessary, it is desirable that the primary focus of fiscalconsolidation measures should be on reductions in public spending. the commission on taxation and the special group on public service numbers and expenditure programmes will help identify