jens weidmann : current developments in the euro area speech by dr jens weidmann, president of the deutsche bundesbank and chairman of the board of directors of the bank for international settlements, at the bank of slovenia, ljubljana, 1 march 2017. * * * 1 introduction governor jazbec ambassador riedel ladies and gentlemen i am delighted to have the opportunity to return to slovenia – and to ljubljana. i was here just over four years ago to attend the external meeting of the ecb governing council. so i already know the charm ljubljana holds for its visitors. this time, i will also have time to visit the national gallery, where i am especially interested in seeing the works of slovenian artists. to me, art is far more than mere decoration : it grants insights – for example, into a country ’ s soul at a given point in time. johann wolfgang von goethe, the great german poet, summed up this aspect of art as an expression of our inner selves when he said : “ the mediator of the inexpressible is the work of art. ” ladies and gentlemen, by accepting the invitation of the bank of slovenia to this event, you no doubt had the expectation that i would express my views clearly. indeed, this afternoon is dedicated to a format that stands for arguments and facts – meaning the opposite of “ inexpressible ”. in my speech i would like to shed some light on current euro - area developments and the challenges ahead. i will then be glad to discuss with you the picture i have drawn. 2 economic situation and monetary policy the current economic situation of the euro area is quite good. the upturn has stabilised. with a macroeconomic growth rate of 1. 7 %, gdp in 2016 actually grew more quickly than euro - area production capacity ; the output gap is gradually closing. thus, unemployment in many euro - area countries is falling ; in 2016 the unemployment rate for the euro area as a whole declined by almost 1 percentage point to 9. 6 %. that means it is now just a little less than 1 percentage point above its average in the pre - crisis years. the current eurosystem projection from december assumes that the euro - area economy will continue to grow ; namely by 1. 7 % this year and by 1. 6 % in each of the next two years. a similar economic situation holds for slovenia and germany. both countries currently benefit from robust economic growth. in fact, capacity utilisation

us trading times. the new enterprise is based in frankfurt. the german - chinese exchange will operate using the established and globally available infrastructure of the deutsche borse group. the three joint venture partners intentionally chose frankfurt as the financial platform from which to offer their service in a european regulatory environment and in the european and american time zones. the money flows resulting from securities settlement are to be channelled through the clearing infrastructure provided in frankfurt. in my view, china ’ s real economic development and the launch of the china europe international exchange will give rise to additional volumes of rmb payments. the german banking industry will decide which channels shall be used to clear rmb payments. nevertheless, i would wish that the german banking community will support the german financial market to become an rmb hub. this could be done by processing rmb transactions via the rmb clearing bank in frankfurt. potential prospects the bundesbank operates the target2 system together with the french and italian central banks, while the eurosystem is currently looking at strategically enhancing its market infrastructures. for example the eurosystem discusses to offer multicurrency services in a future target2 system. for such a new service the renminbi and its processing would be a candidate. a connection on infrastructure level between the chinese payments traffic and an enhanced target2 system – we can call it target3 – would also an option. however this will only be possible, if both systems use a harmonised iso 20022 standard. this is not yet the case today. all in all the surrounding will remain interesting and exciting. many new ideas and visions can still be developed. bis central bankers ’ speeches