under the protection of the united states. we have set ourselves up in a multilateral world. but the old world order is being challenged. in the worst - case scenario, there is a risk that power and size will matter above all. in such a system the great powers, the us, russia and china, would dominate. the voices of smaller countries would lose their relevance if they act in isolation. and let ’ s face it, even the biggest european countries fall into this category if left to their own devices. if we want to protect our interests and our conception of how we want to live together, then we have to stand together. and that ’ s only possible through the eu. one of the biggest challenges is populism, which takes aim at the eu in many ways. how can we convince people that populism will lead to our undoing? we are seeing mistrust in and scepticism about the elites. all too often, problems and grievances, which of course exist in our societies, are no longer being addressed in order to seek the right solutions, but are becoming the expression of a general rejection. populists promise supposedly simple solutions which are, at the same time, specious and ultimately 1 / 4 bis central bankers'speeches harmful. how can you take a stand against them? first of all, you should listen and take people ’ s concerns seriously, because it ’ s essential to consider carefully the real and supposed grievances and, if possible, resolve them. lastly, it ’ s necessary to explain the consequences of political action : if people vote for populists who idealise the nation state and make its sovereignty absolute, then those voters have to know that, although they would live in smaller, easier - tocontrol markets, it would also mean much higher prices for consumers and reduced prosperity. basically, as i see it, people vote for populists in order to protest, but not to reject the eu as such. given the current mood, do you still see any opportunities for further steps towards integration? yes, we are working on a deepening of the single market to facilitate free trade. for example, if the eu harmonises the performance of vacuum cleaners, then they can be marketed right across europe, in addition to being a factor in energy efficiency. but people see this as “ brussels ” wanting to impose a diktat, as almost some kind of “ harassment ”. harmonisation

possibly more – other major international currencies. second, the euro can only be assured of a major role in a multipolar currency world if the architecture underlying the single european currency is sufficiently strong. the task of achieving this cannot be delegated to financial markets and requires appropriate institutional steps. the euro in a multipolar world when the idea of the single currency was first mooted in the 1980s, the global economy was dominated by three countries : the united states, germany and japan. since then, the global economy has seen major changes. with the ongoing integration of global markets, we have witnessed the rise of emerging market economies. china, in particular, has led to a progressive shift in the centre of economic gravity and is expected to overtake the united states in terms of gdp at market exchange rates sometime from 2025 onwards. the us dollar has remained the main international currency, as a result of the predominance of us financial markets and also the inability of several emerging economies to pursue independent policies ( for example by de - pegging their currencies from the us dollar ). but there is little reason to believe that these factors will not change over time. the renminbi, in particular, should be in a position to relatively quickly emancipate itself from the dollar and become a major international currency if the chinese authorities were to consistently pursue capital account liberalisation, greater exchange rate flexibility and all related policy measures in the years to come. the international role of some other emerging market currencies is also likely to increase over time. we are clearly moving towards a multipolar currency world. the question is whether the euro will be one of the poles – so to speak – of the new system. i will not dwell on the advantages for europe of being one of the poles, but rather i invite you to reflect upon what would happen if it were not. to be sure, the euro, like any other currency, would be affected by economic and political developments in the countries issuing the leading reserve currencies, and would suffer severely from external shocks. consider, as an illustration, the recent experience of the swiss franc, a currency which is renowned for its stability. after the onset of the global financial and economic crisis the franc appreciated by 17 % vis - a - vis the euro in 2010 alone, driven by the reallocation of global capital on a massive scale. this has fuelled deflationary risks and slowed economic growth. to counter