also be possible to do so. in belgium the debate on the reform of corporate tax, for example, has been going on for quite some time. there is still a heavy reform agenda. much still needs to be done and not everyone agrees on how to go about it. the risk is that the appetite for reform will wane as the economy improves. people have a tendency to lean back and take a break. is that what ’ s happening in belgium now? not only in belgium. there is a sort of honeymoon atmosphere. times have been hard and people would like to take a break from reforming and enjoy the improvements for a while. there ’ s a kind of reform fatigue. but not everyone is enjoying the recovery because unemployment is still too high and there are differences in contracts between insiders and outsiders, etc. but it has to happen, because monetary policy can ’ t fix everything. france is a good example. the financial situation there was not much different to that in germany. there was no banking crisis in france. but growth has been weaker in france than in germany, because german industry was able to adapt, to focus on new markets – first china, then the united states. they have more smes that are export oriented, whereas french industry is much more dependent on a number of national champions. this shows that there are limits to what monetary policy can do. critics are saying that the ecb ’ s low interest rate policy is reducing the incentive to reform. governments should have made more use of the low interest rates. but the fact that there has been too little reform isn ’ t because low interest rates are making it easier for them to muddle through. rather, it ’ s because they aren ’ t managing to sell the reforms. i talk to politicians regularly and they all know what needs to be done. but they are also afraid that they won ’ t get elected again afterwards. i hope that the general public, through seeing better and better results, will start to grasp the importance of reforms. will the [ rise of the far left ] ptb party in wallonia have a major impact? yes, i ’ ve seen it. but take macron : he ’ s been able to build a movement because there was a window of opportunity to go for reforms. but that has nothing to do with the interest rate. in france the public voted for macron because they want changes, but we have yet to see which ones will actually get through. in belgium the government

pandemic, russia ’ s invasion of ukraine and geopolitical tensions. there are severe downside risks due to disruptions of supply chains, higher prices for energy and commodities, and the reshoring of global production. economic uncertainty is extremely high. additionally, we need to manage – and in fact speed up – the climate transition. this requires structural adjustments to our economies and our lifestyle. dealing with these challenges at the same time is asking a lot from our modern societies. but transitions have been managed successfully in the past. learning from the experiences of the transition economies can be a source of inspiration and encouragement. one main lesson that i see in estonia ’ s transformation process is that stable institutions are key. they are especially important in times of crisis and structural change. stability - oriented central banks are a key element of our institutional infrastructure. they are sometimes criticised for being not flexible enough to help resolve the problems facing society. if central banks argue that they need to act “ within their mandates ”, this is not because they do not want to take responsibility within and for society. it is not because they define their role in a legalistic way. on the contrary : acting within the mandate that society has assigned to – powerful – institutions like central banks is precisely the responsibility that we have. it is only through that mechanism that the power of central banks can be used in a democratically legitimate way. this, in turn, requires transparency and accountability vis - a - vis society. the specific tasks of central banks may change over time – but such changes should be based on a societal and democratic consensus. thirty years ago, the introduction of a national currency was seen as an integral part of nation building, a symbol of the return to europe, and an instrument to achieve financial stability. this brings me to my second point : stable institutions need society ’ s support. economic decisions – like the introduction of a currency and of a currency regime – are not technocratic, economic decisions. they are decisions about the direction a society will take. they reflect the commitment of a society to support the direction of travel and its willingness to endure the potential hardships this entails. they require democratic consensus on how to deal with negative shocks and how to allocate the associated costs. [ 52 ] this is a lesson that is highly relevant for many future economic decisions that are needed to master the structural change that lies ahead. and there is a third important lesson : cooperation and international coordination are crucial. international cooperation allows