jean - claude trichet : welcome remarks for the euro - mediterranean seminar welcome remarks by jean - claude trichet, president of the european central bank, at the euro - mediterranean seminar, eurosystem and mediterranean country national central banks, naples, 14 - 15 january 2004. * * * your eminence, minister for european affairs, members of the italian parliament, president of the region, mr mayor, distinguished guests, fellow governors, ladies and gentlemen, i would like to welcome you most warmly to this first euro - mediterranean seminar of central banks. i am particularly happy to see so many governors here from central banks of non - euro area mediterranean countries, who are joining colleagues from eurosystem national central banks. this seminar marks the will of the eurosystem to pursue a regular and active dialogue with the national central banks of mediterranean countries. it is also a good example of the fact that the eurosystem acts as a team : in this spirit, we asked the banca d ’ italia to host the seminar and i would like to thank governor fazio for having accepted, for having co - organised the seminar with the ecb and, of course, for choosing naples. there is hardly any other place in italy, or even in europe, more suited to serve as the location of this meeting. from its foundation by greek settlers to the city of today, naples has retained the imprint of the successive cultures that emerged in europe and the mediterranean basin. this makes it a unique site indeed. our meeting here in naples is both a real novelty and a sign of continuity. as you are all aware, there are a number of meetings and fora, which bring together representatives of mediterranean countries and the eu to discuss economic and financial issues. these meetings take place as part of the barcelona process, which was initiated in 1995 to foster cooperation between the northern, southern and eastern shores of the mediterranean in various spheres. as you know, it comprises the eu and 12 partner countries in the mediterranean. so far, however, central banking issues have not played a prominent role in this framework, and central bankers from the two regions do not have a multilateral platform for an exchange of views. this high - level seminar, and the preceding workshop that was held in frankfurt in october last year, are not formally part of the barcelona process. they are events initiated by central banks for central banks. they fill a gap in the network of institutional relations with and within the mediterranean, and i am convinced that these

headline and core inflation went down to 6. 4 and 2. 7 percent, respectively, due to moderating commodity prices as well as government measures, the risk on inflation from high and volatile commodity and oil prices remains, particularly given the constraint in supply adjustment. in the meantime, the risk of global economic downturn seems to have accumulated as the bottom - out of us subprime problem is still uncertain. this has, in turn, affected the outlook for thai exports as the economic prospects of thailand ’ s major trading partners, such as european union and japan, became less positive. overall, the impact of bleaker global economic outlook depends on the degree of decoupling from developed economies and the consensus among central bankers over the world is that it is perhaps unrealistic to assume that emerging economies in general will be able to decouple. therefore, it is more an issue of a time lag and at the present time we must wait and see when this moment of truth arrives and what the impact will be. i believe that unless the global economy dips below what we anticipated, the impact on the thai economy will be manageable. at this juncture, let me emphasize that thailand ’ s underlying economic fundamentals remain sound and growth momentum on track. during the first half of 2008, the thai economy achieved a favourable growth rate of 5. 7 percent, improving from the growth of 5. 3 percent in the second half of last year. even though three of the four main engines of economic growth, namely consumption, investment, and public expenditure, remained mostly subdued, the performance of net exports was notably better - than - expected. this reflected export sector ’ s substantial efforts to adjust to slowing global demand by diversifying into new markets. meanwhile, on the supply side, agricultural production was the key growth contributor, due mainly to an increase in crop production in response to higher market prices. in fact, economic indicators for july showed the continued expansion on both production and demand sides. farm income from major crops was up by 69. 5 percent from the same period last year, due to expansion of both production and prices of paddy rice, rubber, and oil palm. manufacturing production also registered a satisfactory growth of 11. 3 percent during the first seven months. on the demand side, private investment and consumption continued its recovery trend. exports also expanded well in line with production expansion. meanwhile, imports accelerated, partly in response to improvement in domestic demand. even though this resulted in a current account