mr duisenberg reports on the outcome of the latest meeting of the ecb governing council introductory statement given by mr willem duisenberg, president of the european central bank, to the press conference, frankfurt, on 9 september 1999. * * * ladies and gentlemen, the vice - president and i are here today to report on the outcome of today ’ s meetings of the general council and the governing council of the ecb, which were attended by mr de silguy, european commissioner. the governing council reviewed the outlook for price developments and the risks to price stability in the euro area, in line with its monetary policy strategy. as a result, the governing council decided not to change the prevailing ecb interest rates. the interest rate on the main refinancing operations of the eurosystem will thus remain 2. 5 %. in addition, the interest rate on the marginal lending facility will continue to be 3. 5 % and that on the deposit facility has been kept at 1. 5 %. let me give you some details about our review of the latest information on monetary, financial and other economic developments, as well as about our latest assessment of the monetary policy stance and thereby explain the decisions taken today. with regard to monetary developments in the euro area, the 12 - month growth rate of the broad monetary aggregate m3 increased from 5. 3 % in june to 5. 6 % in july 1999. the latest three - month average of m3 growth, covering the period from may to july 1999, rose to 5. 4 %, compared with 5. 3 % in the previous three - month period from april to june 1999. overall, the annual rate of growth of m3 has been moving away from the reference value of 4. 5 % since the start of the year. this upward movement may be explained to a large extent by the very low opportunity costs of holding monetary assets, especially the most liquid components, but perhaps also by the gradually improving economic conditions in the euro area. at the same time, the annual growth rate of credit to the private sector remained high, even though it declined by 0. 5 percentage point in july, to 10. 4 %. the monetary policy strategy of the eurosystem assigns a prominent role to the behaviour of m3. accordingly, recent monetary developments merit close attention. at the same time, taking into account the fact that we are still in a very early phase of monetary union and that figures for broad money growth have been subject to some revisions

s essential that labour can flow to the most productive firms, rather than being bottled up in the least productive. that in turn requires that the most productive firms are able to grow and create new jobs. and it requires that workers have the incentives, skills and means to move to them. in an average mature economy, around 50 % of productivity growth comes from such reallocation. when people think about reallocation, they tend to think in terms of people moving across sectors. but typically, that only accounts for a small share of productivity growth. 18 what ’ s more important for mature economies is within - sector reallocation, which means shifting resources towards the most productive firms within each sector of the economy. that ’ s encouraging because expecting, say, steel workers to become bankers is not realistic. but expecting them to move to better firms within their sector is. for this to happen, however, the structural conditions have to be right. product markets have to allow market entry, to challenge unproductive firms ; they have to support firm growth, so that the most productive can reach their optimal size ; and they have to facilitate quick bankruptcy, so that the weakest firms can exit. similarly, labour markets have to set incentives for mobility ; support retraining and upskilling where needed ; and allow wages to match productivity at the firm level, creating proper market signals. clearly, for firms to prosper in this environment, they need to be agile. increased agility would enable firms to switch production towards the higher quality, distinctive, more customised goods and services increasingly demanded by ever more sophisticated customers, which has long been the strategy of europe ’ s leading exporters. 19 and since such goods and services typically command a price premium in the market, that would in turn lift the value of output, raise national income and secure and expand employment. david autor and david dorn, the growth of low - skill service jobs and the polarization of the us labor market, american economic review, 2013, 103 ( 5 ) : 1553 – 1597. see the article entitled, “ what is behind the recent rebound in euro area employment? ”, ecb economic bulletin, no. 8 ( december 2015 ). ulf lewrickb, lukas mohlera and rolf weder, when firms and industries matter : understanding the sources of productivity growth, bis working papers no 469 ( october 2014 ). among several other papers, see e. g. krizan