for instructions. it was for monetary policy reasons that the governing council, in full independence, adopted all the non - standard measures. the crisis is being caused by excessive debt in euro area countries. do we need a political union, or is a return to the stability and growth pact of maastricht sufficient in order to prevent such events from recurring in the future? what is important at the moment is to monitor compliance with the now considerably stricter stability requirements. we had initially called for these to go further – calling, for example, for more automatic sanctions against “ deficit sinners ”. significant progress has been made, and that now needs to be rigorously implemented. that includes strengthening the presidency of the eurogroup and the body of staff which is to monitor economic developments. in the medium and long term we need to strengthen europe ’ s political structures, which will not be possible without amendments to the treaty. i would say – as a citizen of europe, not as president of the ecb – that we could proceed in the direction of significantly stronger european governance with well - defined responsibilities. with that new governance, it would be possible, in countries that consistently fail to comply with stability requirements and thereby threaten the financial stability of the euro area, to directly implement appropriate measures. in the long term, therefore, we will need to go further in the direction of political union. but the decision on that will lie with the people of europe. what was your most important decision, your greatest success? as a central banker, you are constantly taking important decisions – for example on interest rates. all of these decisions are taken with the aim of ensuring price stability, which is a prerequisite for sustainable growth and job creation. as a result, it is difficult to say that a particular decision was the most important. but the greatest challenge for the ecb ’ s executive board was to recognise in 2007, in real time, that something very significant – something very dangerous – was happening. we were the first central bank in the world to recognise the reality of the situation and quickly implement comprehensive measures in response. horst kohler, with whom you negotiated the maastricht treaty, describes the markets as “ monsters ”. is he right? i would not necessarily go as far as horst, for whom i have great respect, but i can see what he could have meant by that. supervisory authorities need stronger means of monitoring the rapid development of new technology and need to ensure that all innovation in the financial

what kind of future would europe have without the euro? we have to be very careful to distinguish between the euro as a currency and the problem of financial stability in the euro area. the first 13 years of the euro have seen the currency retain its value, both domestically and externally. annual inflation currently averages 2. 0 % – and just 1. 56 % in germany. that is lower than in the previous 50 years. inflation will, in all probability, remain very low for the next ten years – at around 1. 8 % according to current expectations. so, we have price stability in the euro area. we are rightly proud of that fact, as we have achieved what was expected of us : we have secured price stability and ensured that the euro is a credible and trusted currency. the financial stability of the euro area is a different story. this has been undermined by mismanagement on the part of certain governments. however, following the decisions taken this week, i am confident that governments can succeed in restoring financial stability. a critical issue in this respect will be the will of the people. i was very impressed by the decisiveness displayed by the german parliament this week. bis central bankers ’ speeches the euro ’ s rescue fund is being significantly strengthened, with its total firepower set to reach €1, 000 billion. does this mean that the ecb will, in future, be able to do without its controversial purchases of stressed countries ’ government bonds? we have adopted special measures during the crisis because they were necessary in order to correctly transmit our interest rate decisions to the economy. in august 2007 we supplied banks with liquidity at fixed rates of interest in order to stabilise the markets. second, we took the decision to buy covered bonds. and third, we intervened in some government bond markets to help improve the transmission of our monetary policy. such actions are only justified in the exceptional circumstances of a major global crisis. once national governments ’ new tools to restore financial stability are up and running, we will have no reason to continue with these special measures. does the ecb really have complete freedom as regards government bonds, or is it under political pressure? the ecb takes its decisions in full independence. we have consistently demonstrated this, taking controversial decisions on interest rates and other matters. under the treaties, members of the ecb ’ s governing council are not permitted to take instructions from anybody – neither from governments nor from interest groups. indeed, they are not even allowed to ask