beyond the euro area : the non - euro area eu member states, many eastern european, middle eastern and african countries are positively affected by the euro as well. the euro is a key currency for monetary policy in many countries. in 2006, 25 % of all official foreign exchange reserves worldwide were held in euro. since its introduction, the euro has become the second most widely used currency in the world. and in terms of banknotes and coins in circulation, the euro with 646 billion has already overtaken the us - dollar. 2 e. g. richard baldwin, co - author of “ the economics of european integration ” ( together with charles wyplosz ). usd banknotes and coins : usd 810 bn = euro 615 bn ( all data and the respective exchange rate by the end of 2006 ). moreover, the euro has proved to be a stabilizing influence not only for the european capital markets, but also for the international financial system, as was demonstrated after the shocking and very tragic events of september 11. how did the euro establish itself that swiftly as an anchor of stability? to answer this question, monetary, fiscal and structural policies in the euro area have to be considered. let me start with monetary policy. the monetary policy framework of the european central bank ( ecb ) and the eurosystem respectively, which includes the national central banks of the euro area, is based on central bank independence, transparency, accountability and an explicit mandate to maintain price stability. the eurosystem goes to great lengths to communicate the ecb ’ s monetary policy strategy, the rationale for monetary policy decisions and our assessment of economic developments. these communication efforts not only take the form of regular testimonies in the european and national parliaments, periodic bulletins and speeches, but also take place in “ real time ” : ecb president jean - claude trichet explains the monetary policy decisions and the underlying reasoning in press conferences which take place immediately after governing council meetings and which provide “ question and answer sessions ” for journalists. the ecb ’ s monetary policy is based on a clearly defined monetary policy strategy aimed at fulfilling our primary mandate of price stability. this is defined as an inflation rate of below, but close to 2 % over the medium term. by and large we have maintained price stability since the introduction of the euro despite a difficult macroeconomic environment characterized by a high level of uncertainty and a series of adverse external and internal shocks : oil price developments accelerated inflation ; at the

of housing consumption loans, especially prohibition of mortgage refinance loans and additional mortgage loans for unspecified purposes and fluctuating with the valuation of real estate ; 3 ) guidance of individuals ’ consumption and investment and higher minimum down payment ratio and lending interest rate for second home mortgages ; 4 ) inclusion of solely foreign - invested commercial banks and joint - stock commercial banks into the regulatory policy system ; 5 ) strengthened credit information management in the real estate sector to fully leverage the credit information system that includes both enterprises and individuals. recently the pbc and the cbrc issued the supplementary notice in accordance with housing consumption policies and other policies at the state level. first, the number of home loans is calculated by households ( including loan applicants, their spouses and children ). in china, housing is a necessity for family life, so it is more reasonable to calculate the number of home loans by households, both in line with our national situation, and conducive to the enforcement of the notice, guidance and promotion the reasonable allocation of real estate resources and strengthening the macro - regulation of the real estate industry. second, given the reasonable demand of residents to improve their living conditions, households having purchased the first home with loans whose per capita residential space is lower than the local average level, first home loan rate applies if such households apply for a second mortgage, so as to curtail irrational demand ( including speculation ) and improve people ’ s living conditions. this policy is consistent with the notice. after borrowers present information of total living space certified by real estate administrative authority according to their registration information, commercial banks decide whether first home loan rate shall apply against living space information, residential permit and other documents, while the average per capita residential space comes from last year ’ s figure released by statistics department. second home interest rate applies to re - borrowers who don ’ t conform to the above conditions. third, the supplementary notice prescribes that housing provident fund loans are also subject to the notice. either housing provident fund loans or commercial loans are the liabilities of households. housing provident fund loans will not exempt from market volatility. therefore, second home loan rate applies to households who are in housing provident fund loan scheme and who are applying for commercial loans. there are some requirements concerning how to further implement the notice and the supplementary notice. first, reach a common understanding. regional offices of pbc, cbrc and commercial banks shall carefully study the spirits of the 17th cpc congress and central