and harm to the reputation of the international monetary fund and its ability to raise funds outside europe. i am therefore very glad that this session is devoted to the facility, whose importance to europe and especially to the euro area is much greater. bis central bankers ’ speeches i could list other problems, such as the delayed consolidation of the european banking system and the related recapitalisation of banks, and in particular the fact that the existence of the euro area has widened the long growing imbalance in the exchange of goods, capital and savings between euro area countries. the short - term rescue of the euro will not directly solve the long - term problem of imbalances, and in particular the gradually emerging path towards a fiscal pact with no significant redistribution of resources at european level will require the elimination of, or at least a considerable reduction in, the imbalances in the euro area. in the context of the three change drivers i mentioned earlier, i would like to say that the time that the ecb ’ s pre - christmas actions gave the euro area, the european financial sector and many european states to solve their problems is useful but not infinite. i believe that the potential of the fiscal pact to become a true change driver is smaller than generally assumed, and i expect that the future formulation of the pact in the constitution of each country will contain ( abusable ) escape clauses. i base this view in particular on the fact that throughout its existence the euro area has had a tendency to soften or bend the criteria for its operation. be it the not - always - proper manner of fulfilment of the maastricht criteria by accession countries or the revision of the stability and growth pact or the purchase of government bonds by the european central bank, we have repeatedly seen how things that are initially unthinkable become reality over time. i am doubtful that investors, who are well aware of europe ’ s relationship to the rules, will change their attitude as a result of the fiscal pact. my overall view on the current design of the facility is none too optimistic. to enhance its ability to face the debt crisis, we need to find a clear consensus on its mission. we need to precisely identify whom it is supposed to help, under what circumstances and to what extent, and to derive from that the amount of funding it needs. this will predetermine the solutions to all the issues surrounding its operation. we have time to solve all these problems, but not much time. thank you

to aa +. in its comments on this change, s & p stated explicitly that the efsf ’ s rating has a developing outlook, which means that the agency foresees the possibility both of returning the rating to aaa ( if offsetting credit enhancements are adopted ) and of downgrading it further to below aa + ( if key guarantor countries are downgraded ). a lower efsf rating would probably be associated with higher interest costs of refinancing. there might even be a fall in liquidity in the efsf bond market owing to the exit of some institutional investors, who primarily target the aaa segment of issuers. 6. on a more general level, the lack of coordination of resources for supporting european countries is disturbing. it is resulting in fragmentation of resources and a lack of transparency in the setting of parameters such as “ who ”, “ how much ”, “ to whom ” and “ how ”. specifically, the european union, or the euro area, is planning simultaneously to lend to the international monetary fund, to guarantee the efsf and to guarantee the esm, while central banks guarantee the capital of the ecb. if a non - european country wanted to help europe, there is the question of whether it should send the money to the imf or use it to purchase efsf bonds, a senior tranche of the spv, or the peripheral countries ’ debt, i. e. with no intermediation. the many uncertainties associated with the specific operation of the efsf are giving rise to general doubts about the appropriateness of the current approaches to overcoming the ongoing debt crisis in the euro area. i cannot help feeling that many solutions to the problems have been wrongly chosen in part because the main causes of the financial and debt crisis have not been correctly identified. greece gets too much attention from decision - and policy - makers. it represents a mere 1 / 50 of the european economy. i believe that without the political will to provide greece with massive support from european funds to restore its competitiveness – and i see little such will at the moment – its exit from the euro area will be inevitable, since depreciation of the greek currency will become part of the measures to restore competitiveness. the provision of loans to greece has so far primarily bought time. this has enabled wealthier greeks to transfer their savings out of the country. the costs of such action have been a reduction in europe ’ s credibility