mario draghi : significant progress in 2012 and prospects for 2013 address by mr mario draghi, president of the european central bank, at the new year ’ s reception of the frankfurt chamber of commerce and industry, frankfurt am main, 22 january 2013. * * * minister - president bouffier, lord mayor feldmann, president muller, ladies and gentlemen, it is a great pleasure for me to be here with you this evening, and i would like to thank the chamber of commerce and industry very warmly for inviting me. i am pleased to meet many representatives of the business community and public life of the region rhein - main and frankfurt, the city in which the ecb is so well hosted and where i also feel personally very comfortable. a new year ’ s reception is always the occasion to look back on what has happened in the past year and to look forward to what lies ahead. 2012 was a year full of challenges. yet it was also a year of surprises and new beginnings. we began the year in an environment of exceptional uncertainty. the euro area was faced with deep, even existential challenges. this led some experts to make bleak predictions about the future. they doubted the resilience of our economies. they worried about the stability of our single currency. they even questioned its future existence. to illustrate just how far some doubts went, let me quote the from the economist ’ s annual publication “ the world in 2012 ”, which in the autumn of 2011 said the following : “ if you were sitting down with a blank sheet of paper, you would advise the euro zone to complement its one - size - fits - all monetary policy by pooling sovereignty and creating new institutions. you would set up a european mini - imf with enough funds to assist troubled countries that adjust their economies. a pan - european banking regulator and a bail - out fund could ensure that large european banks were not at the mercy of their vulnerable sovereign borrowers. [ … ] and, to stop governments from exploiting these mechanisms, euro - zone countries would agree to submit their fiscal policies to the say - so of everyone else. it amounts to a blueprint for the united states of europe. and it is utterly beyond reach. ” 1 if we look back at 2012, on virtually all of these issues, europe is moving forward or is already there. so the ambition is not “ utterly beyond reach ”. indeed, it bears out what walter hallstein, the first president of the european commission,

once said : that “ anyone who does not believe in miracles in european matters is not a realist ”. 2 due to resolute actions by euro area governments and european institutions, the year 2012 turned out quite differently than predicted. the darkest clouds over the euro area subsided. countries renewed their commitment to reforms. the euro area took strides forward in its common governance. the economist : “ the world in 2012 ”, 16 / 11 / 2011. walter hallstein : „ wer in europaischen dingen nicht an wunder glaubt, ist kein realist “. bis central bankers ’ speeches europe ’ s policy - makers, including the european central bank ( ecb ) within its mandate, left no doubts about their commitment to our common currency and to its stability. we can begin 2013 on a more confident note, precisely because significant progress was made during 2012. significant progress in 2012 first of all, governments did their part to ensure stability. during the last year, an important change took place “ on the ground ” in the economies of europe. the necessary rebalancing of the euro area economy gathered pace. a comprehensive adjustment in the deficit countries is now taking place. many countries are making solid progress in bringing their public finances under control. they are enacting structural reforms to increase competitiveness. this is especially true for the countries under an eu / imf programme, where adjustment has been extensive. reducing the imbalances is certainly a difficult and painful process. but it is essential to restore sustainable public finances and growth. the people in the countries concerned have broadly understood this and backed this course of action. the progress made deserves public recognition and respect. governments also came together in 2012 to strengthen the euro area and its ability to prevent and react to crises. the european stability mechanism became active and provides a solid safety net if needed. the new rules for governing the euro area economy were applied to strengthen oversight of budgets and to monitor emerging imbalances more effectively. member states agreed to put debt brakes in their national constitutions. most importantly, europe ’ s leaders recognised that monetary union needs to be complemented by a financial union, a fiscal union, a genuine economic union and eventually a deeper political union. discussions are underway with clear timelines in the months ahead. the most urgent project – financial union – is now taking tangible shape. the ecb is expected to become the single supervisor for the biggest part of the euro area ’ s banking sector. this is