financial integration. in 2017, the european economy grew at its fastest rate in 10 years and for the first time since 2007, all member states saw their economies expand. for 2018, gdp growth is expected to remain strong, based on strong private consumption as well as increased investment and exports, and unemployment rates are receding toward pre - crisis levels. robust growth helps both further reduce government deficit and debt levels and improve labor market conditions. “ the wind is back in europe ’ s sails. but we will go nowhere unless we catch that wind, ” as president juncker said in his 2017 state of the union address. we can use the current good times to make our economies more resilient. this means building fiscal buffers and implementing further economic reforms to strengthen the foundations of our economic and monetary union. we have already made great strides in making its architecture more robust, but it is still not complete. further work lies ahead to make sure that the benefits of emu reach all eu citizens. the date of this year ’ s economics conference was not chosen randomly. the beginning of july coincides with the start of the austrian eu presidency in the second half of 2018. after 1998 and 2006, this is now the third time that austria is holding the presidency of the council of the european union. this time, the presidency faces major challenges including • the brexit negotiations with the u. k., • the debates on the multi - annual financial framework, • progress in completing banking union, • the implementation of the european security and migration agenda, • the fight against terrorism, and • the debate on the future of the european union. the austrian eu presidency takes place at a politically sensitive time as the european parliament ’ s legislative period ends in 2019. important dossiers have to be finalized before the european elections in spring 2019. for the european union as a whole, the euro is a symbol of a peaceful europe, a keystone of economic integration and political unity. for the world, the euro has become a major player in the international monetary system and the second most important global currency. the single currency rests on a common monetary policy, where the governing council of the ecb can and must only target the euro area aggregate when taking monetary policy decisions. in mid - 2012, mario draghi ’ s statement that the ecb is ready to do “ whatever it takes to preserve the euro, ” within our mandate undoubtedly reestablished confidence in sovereign bonds. in response to the crisis, the eu moreover

– particularly at the present juncture of considerable model uncertainty – to any mechanical rule - based approaches. the latter are usually taylored to specific views of how the economy operates and are therefore less likely to perform well in periods where these views might have to be adapted. monetary policy rules usually derive their policy recommendations from a very narrow set of economic indicators only. in many cases they rest heavily on the output gap and the equilibrium real interest rate, which, as i have pointed out, are potentially very unreliable concepts at the present juncture. financial stability third, the financial stability of the euro area has been enhanced by the single currency ; the latest developments have provided indisputable proof of this. generally, the implementation of monetary policy in the euro area has proved highly efficient. the eurosystem has successfully introduced a market - oriented, modern and flexible operational framework. the money market has clearly benefited from this in its refinancing operations. short - term interest rates have totally converged and the money market within the euro area has become fully integrated. as a result, we have an efficient and liquid euro money market, and banks benefit from the conformity of market conditions. the euro money market has widely used daily reference indices for interest rates, notably eonia for overnight transactions and euribor for transactions with longer maturities. these euro area indices were swiftly accepted on the market and form a common basis for pricing. market participants are now able to manage their day - to - day funds in an efficient manner, incurring relatively low costs. the rapid integration of the euro area's money market was also supported by the developments in the payment systems infrastructure, above all the establishment of the target system operated by the escb, which links the national real - time gross - settlement systems with the ecb's payment mechanism. the smooth functioning of the settlement of cross - border payments allows banks to trade safely throughout the euro area. therefore the money market has gained a clear cross - border orientation, and some large banks have started to act as " money center " banks, based on a euro areawide scope of activity. the broadening of the market and the increasing share of cross - border transactions have had a positive impact on the provision of liquidity : the wider euro area money market can now absorb liquidity shortages more easily than before, as banks can borrow more readily from foreign institutions or vice versa. when the terrorist attacks in the united states triggered some threats to the short - term