me now explain our assessment in greater detail, starting with the economic analysis. euro area real gdp increased by 0. 1 %, quarter on quarter, in the second quarter of this year, revised up as compared with the earlier estimate. since the summer months, incoming data and survey evidence have overall indicated a weakening in the euro area ’ s growth momentum. this information has now been incorporated into the most recent forecasts by private and public institutions, which indicate a downward revision of real gdp growth over the projection horizon up to 2016, with the outlook for a modest economic recovery remaining in place. this picture is broadly in line with the governing council ’ s current assessment. on the one hand, domestic demand should be supported by our monetary policy measures, the ongoing improvements in financial conditions, the progress made in fiscal consolidation and structural reforms, and lower energy prices supporting real disposable income. furthermore, demand for exports should benefit from the global recovery. on the other hand, the recovery is likely to continue to be dampened by high bis central bankers ’ speeches unemployment, sizeable unutilised capacity, and the necessary balance sheet adjustments in the public and private sectors. the risks surrounding the economic outlook for the euro area continue to be on the downside. in particular, the weakening in the euro area ’ s growth momentum, alongside heightened geopolitical risks, could dampen confidence and, in particular, private investment. in addition, insufficient progress in structural reforms in euro area countries constitutes a key downward risk to the economic outlook. according to eurostat ’ s flash estimate, euro area annual hicp inflation was 0. 4 % in october 2014, after 0. 3 % in september. compared with the previous month, this mainly reflects a somewhat less negative contribution from energy prices and slightly stronger annual increases in food prices. a fall in industrial goods prices was partly compensated for by an increase in services price inflation. on the basis of current information and prevailing futures prices for energy, annual hicp inflation is expected to remain at around current low levels over the coming months, before increasing gradually during 2015 and 2016. this is also the picture portrayed by the most recent forecasts, which now incorporate the recent sharp fall in oil prices. the governing council will continue to closely monitor the risks to the outlook for price developments over the medium term. in this context, we will focus in particular on the possible repercussions of dampened growth dynamics, geopolitical developments, exchange rate and energy price

mr. duisenberg speaks on changes in european financial systems and the contributions of the ecb remarks delivered by the president of the european central bank, dr. w. f. duisenberg, at a conference on “ monnaie unique et fiscalite de l ’ epargne : quelle europe financiere? ” organised by the european parliament in brussels on 23 / 9 / 98. 1. introduction i would like to express my appreciation for the interesting exchange of views which has taken place during this round table. as was made clear during the discussion, the structure of financial systems in europe will evolve as the single currency is created. the ecb has already contributed to this evolution in many ways and will continue to do so in the future. i would like to make a few remarks on this topic. 2. changes in european financial systems european financial systems are evolving within a global environment, which has become more liberalised, international and concentrated. changes of particular importance in the euro area include technological innovation in payment systems, the supply and trading of new derivative products, and the improvement and diffusion of new risk management techniques. moreover, the environment of european financial systems is characterised by the single market, with new harmonised pieces of regulation and practices developed on the basis of, notably, the banking co - ordination directives, the capital adequacy directives and, importantly in the context of this conference, the investment services directive. the scope and organisation of financial activities in the euro area will also change as a result of the creation of the euro. first, money markets are going to be unified. second, the focus of foreign exchange activities will of course shift to currencies outside the euro area. third, the behaviour of participants in equity and bond markets is likely to be driven less by countryspecific considerations and more by precise, sector - specific or issuer - specific considerations. this latter development is what some commentators have called the development of a “ credit risk culture ”. this development is likely to improve the effectiveness of price formation on european bond and equity markets. this, in due time, will contribute to the smooth functioning of the financing of the euro area economy, as savings are likely to be channelled more efficiently and swiftly through the economy. as such, the development of a “ credit risk culture ” will therefore be a welcome product of european monetary union. 3. contributions of the ecb let me now turn to the contributions that the european central bank