the existence of deep macroeconomic and financial imbalances. in the autumn of 2005, in conditions of inflation observed and projected to be “ normal ”, the ecb ’ s monetary analysis began to record a change in the composition of m3 growth : from a model of growth explained by money demand factors – that we would define as irrelevant to the evolution of spending and prices – to a dynamic associated with increased credit creation – that is, to banks ’ money supply factors. these changes were accepted as indications that the tenor of monetary policy, despite the moderation of inflationary pressures observed and projected, had become too lax. a new cycle of monetary policy tightening was initiated in december of that year, based on considerations inspired by the monetary pillar, where monetary and financial stability is an intermediate objective for attaining a more balanced development of macroeconomic variables and hence price stability over the long term. in a globalised world, the international financial crisis has not spared the euro area. but today we know that preventive action by the ecb, implemented mainly by considering monetary indicators, has mitigated the impact on incomes and inflation. 6 the two operations of three - year refinancing ( ltros ) the monetary analysis has also been an essential strategic tool in diagnosing and managing the crisis. in this regard, the analysis that led to the more recent non - standard monetary policy measures can illustrate how the systematic monitoring of banks ’ liabilities – money in its broadest sense – can provide guidance on the risks faced by the economy as a whole. towards the end of 2011, with a decision unprecedented in the history of the euro, the ecb ’ s governing council decided to conduct two three - year refinancing operations. at the end of february, or when the second three - year operation was completed, the net increase in loans granted to counterparties was around €520 billion. the motivation for the two operations can be summarised by the following strategic view. a central bank is mandated with the crucial task of ensuring the sufficient supply of liquidity to sound bank counterparties in return for adequate collateral. in normal times, “ sufficient liquidity ” means a volume of refinancing in line with the need for banks to meet the obligatory reserve requirements and the financing of other independent factors which explain the growth over time in the demand for money. in times of increased financial instability, “ sufficient liquidity ” indicates a volume of available central bank money which avoids the risk that –

35 – 64 age range. qualitatively, the profile is similar almost everywhere ; the clear exception is germany, where the unemployment rate among 15 to 24 year olds in the first quarter of 2012 was 8 % ; in italy it was 34. 2 %, in spain 50. 7 % and the euro area average was 21. 9 %. these trends reflect a fundamental question : they confirm the particular vulnerability of this essential part of our workforce. the unequal sharing of the “ cost of flexibility ”, only affecting young people, an eternal flexibility with no hope of stabilisation, leads among other things to companies not investing in young people, whose skills and talents often decline in jobs with low added value. the underuse of their resources reduces growth in various ways : it makes the creation of start - ups less likely – and they are on average more innovative than others – it causes a decline in skills in the long run, slowing down the assimilation of new technology and acting as a brake on efficient production tiberi, m., “ ricordo di federico caffe ”, in rivista italiana degli economisti, april 1997, p. 132. caffe, f., la solitudine del riformista, edited by acocella, n. and franzini, m., bollati boringhieri, turin, 1990, p. 258. bis central bankers ’ speeches processes. in addition to undermining society ’ s sense of fairness, it is a waste that we cannot afford. i think it ’ s essential to ask how economic policy conducted in various member states has done its duty in the way desired by caffe. social progress is one of the key objectives of the european integration process : “ the union shall work for the sustainable development of europe based on balanced economic growth and price stability, a highly competitive social market economy, aiming at full employment and social progress … it shall combat social exclusion and discrimination, and shall promote social justice and protection, equality between women and men, solidarity between generations and protection of the rights of the child ”. ( article i – 3 of the draft european constitution ). welfare is not only a remedy for the failure of insurance markets, but also a tool to promote inclusion, solidarity and a sense of fairness. in the three post - war decades ( the so - called “ golden age ” ), which especially in europe were marked by high growth rates, use of advanced technologies, high growth employment,