remain : anonymity, susceptibility to cybercrime and it issues. but above all those, a key issue arises : the problem of competition. will the central bank change into a direct competitor to commercial banks? will it serve as a “ bank of last resort ” for all deposits in bad times? should it also provide credit to the real economy? might it become a real monobank, like the ones we saw a few decades ago in former socialist countries? what would the entire money - creation process look like? these questions are too important to rush around. so far it seems to me like social engineering to talk about abolishing cash fully and issuing digital currency instead. as one of my colleagues once put it : we might have a novel solution, but do we really have a problem? thank you very much for your attention. 3 / 3 bis central bankers'speeches

the forecasts published recently by the commission point to a broadly unchanged situation in the euro area in 2006 and 2007 ; deficit ratios are expected to remain at around the 2005 level of 2. 4 %, while debt ratios, after declining only marginally, are forecast at levels still above 70 % of gdp. this is disappointing against the background of the economic outlook. most countries with an excessive deficit have not corrected their position in a timely manner. furthermore, there is a risk of consolidation delays in other countries. it is crucial to avoid the mistakes of the past, when many countries failed to consolidate sufficiently in good times. the governing council considers that more determined progress is required towards sound public finances in a number of countries, that concrete and credible measures should be implemented swiftly as part of a medium - term - oriented strategy, and that it is vital to consolidate confidence in the revised stability and growth pact by ensuring the sustainability of public finances in the euro area. in terms of structural reforms, the governing council reiterates its call for the implementation of firm measures to ensure open, competitive and well - functioning product and labour markets, so as to foster an attractive environment for investment and innovation and to promote flexibility in wages and prices. there is a broad and firm consensus that such reforms are beneficial in promoting growth and employment and in enhancing the resilience of the euro area economy to external shocks. at the same time, these reforms would further facilitate intra - euro area adjustments by reducing rigidities that contribute, in some economies, to wage developments that lead to high and persistent unit labour cost growth, higher inflationary pressure and losses in competitiveness. examples of such rigidities are low productivity growth due to a lack of competition in some sectors and an explicit or de facto indexation of nominal wages to prices. all in all, a comprehensive set of reforms is essential to strengthen the foundations for sustained growth in output and employment across the euro area, to underpin the ongoing economic recovery and to further smoothen the functioning of adjustment mechanisms in the euro area, thereby facilitating the conduct of the single monetary policy. we are now at your disposal for questions.