indicate a different path. the sovereign debt crisis has roused a sleeping monster in europe : distrust among nations. this is the most poisonous fruit of the crisis. this mistrust is undoubtedly based on objective truths. northern countries in particular rebuke their southern neighbours for reckless public expenditure over the years, the many wasted opportunities to reform their economies and make them competitive again. these views are widely held by public opinion in these countries, whose rulers – democratically elected political leaders – must take them into account. the result is a strong insistence on balanced public accounts : in the indebted countries so that they can be consolidated and in the financially sounder countries because they should set a good example. in all the euro - area countries opinion groups hostile to the euro and the european edifice are gaining traction. in the area ’ s current cyclical conditions this kind of political thinking, which evokes sound principles of social rigour and public morality, risks, however, contradicting the economic line of reasoning and producing long - lasting damage for the entire area. monetary policy ought to be protected from this clash of economic and political reasoning by the same statute of independence attributed to the european system of central banks, which is responsible for its implementation. until now this system has acted consistently. the internal debate within the governing council of the ecb that is occasionally made public is natural in any collegiate body. it is in the interest of all europeans that its independence continue to be defended from within and seen favourably from without. however, the political line of reasoning cannot be ignored. the structural reforms in the euroarea countries that have lagged behind in competitiveness, italy to start with, are vital for two reasons : the first is that they are the only way to unblock the jammed mechanisms of economic development ; the second, equally important, is that they help to increase trust among nations. if the present diffidence should put down roots the entire european construction would be in peril. i would like to conclude with another enlightening reference to carlo azeglio ciampi, when he delivered a speech celebrating the euro ’ s entry into circulation : “ the single currency is above all the result of a desire for cohesion which, along with continuity and consistency of ideals, are the driving force of europe. cohesion is our greatest asset : it must however be willed, and it must have an identity, and a structure that is also institutional. ” 32 speech by the

a scarce commodity? ’, south african reserve bank occasional bulletin of economic notes, october page 4 of 6 growth in both 2015 and 2016. in the months since december 2017, we have seen a rebound in business and consumer confidence. however, a cyclical recovery based on a rebound in confidence will not be enough to grow the economy lower levels of poverty, reduce inequality, generate much - needed employment, and boost government revenues. given the weak medium - term growth prospects, structural reforms and appropriate fiscal policies are critical to boosting potential growth and sustaining confidence levels, by raising productivity and promoting human and physical capital, and enhancing inclusiveness. underlying the subdued growth performance of the south african economy has been the weak trend in gross fixed capital formation, particularly by the private sector. we need to reverse the downward trend in the ratio of gross fixed capital formation to gross domestic product, which had declined to 18. 7 % in 2017, down from a peak of 23. 5 % in 2008. this is some way off the 25 % target set in the national development plan. the role of the south african reserve bank achieving higher potential output growth is not within the power of the central bank. the sarb can, however, contribute to an improved environment in a number of ways. for some time, ratings agencies and investors had identified south africa ’ s institutional strength as one of the stand - out features of its economy. unfortunately, the past few years have seen a steady erosion of some of our key institutions. fortunately, there is now a renewed focus on reversing this negative trend. in fact, this renewed focus is part of the reason forwarded by moody ’ s for retaining the country ’ s investment grade rating. the sarb, specifically its independence coupled with its mandate on price stability and financial stability, is seen as an important part of the institutional strength of the country. we have vigorously and successfully defended attempts to undermine our independence and integrity, and we will continue to do so. page 5 of 6 conclusion to sum up, here is what i have learnt from madiba ’ s legacy : to occupy its rightful place in the global economy, south africa must first get its own house in order. we must start by implementing those policies that we have identified for growth and the development of our people. to protect ourselves from external shocks, we must build buffers by allowing our institutions to work as they were intended to work. as a small open economy, securing future growth requires us to work with our