8 million in the united states. this is encouraging, but it remains insufficient. we cannot be complacent in any respect. europe must develop its growth potential continuously. all countries must pursue resolutely their structural reforms, in pension systems, product market and labour markets. jointly, they have devised the europe 2020 strategy. education, research and innovation is one key area ; resource efficiency a second ; and high employment and social cohesion the third main area. the european central bank fully supports all efforts along this europe 2020 strategy. a specific example is the completion of the single market in services. it makes full economic sense that the internal market in services, which is the sector in which the majority of people work, is fully completed. new areas of growth, like the digital sector, energy and the environment will clearly benefit from more competition and create new jobs. 4. conclusion let me draw to a conclusion. we are today 12 years into economic and monetary union. i have emphasised our achievements and i have emphasised where we need to strengthen the framework. monetary union can function effectively in a europe of sovereign states with an appropriate economic union. and creating an appropriate economic union is where the reform efforts need to be directed. for that, we have to do in europe what alexis de tocqueville so admired in 19th century america, whose greatness did not lie “ in being more enlightened than any other nation, but rather in the ability to repair her faults. ” bis central bankers ’ speeches when repairing the faults in our governance framework, we must not let the indications of economic recovery distract ourselves from the urgency for action. policy - makers must keep in mind that the governance failures of the past are still to be fixed and the growth challenges of the future still to be solved. while i have stressed the challenges we face, we must also recognise our achievements. europe is in the vanguard of nations working together peacefully. we have replaced confrontation and conflict with cooperation and consensus. we have combined political freedom with economic freedom and social peace. these are remarkable achievements – and they are quite clearly achievements to which many people elsewhere in the world are aspiring. it is for this reason that i have dedicated all my working life to put the french - german friendship to the service of europe as a whole, with all nations united. and it is for this reason that i believe deeply in our economic and monetary union. the europe to which i have dedicated my career is one where different countries, different

the interest of the us economy. the interpretation gained added plausibility, despite later denials, when it was seen in conjunction with the fed ’ s earlier announcement on downward risks to the inflation outlook. the likelihood that the us dollar might decline further, with tacit acquiescence from the us authorities, has led many observers to believe that a significant change is occurring in the international environment. a declining us dollar helps the us economy adjust to its problems, but also shifts those problems in part to other countries. in passing, i have to say that i am not criticising the united states for this – to date, they have shouldered more than their fair share of the responsibility for getting a global expansion going. but, if we are interested in increasing global growth, rather than just having a redistribution of the pattern of growth between countries, many countries which have enjoyed the stimulus of exporting to the united states when the us dollar was high will need to find domestic sources of expansion. there is a great deal of scepticism about how successful the two main areas outside the united states – japan and the euro area – will be in this endeavour. it is in this general context that some central banks have reduced interest rates over the past few days. as you know, we did not. this was not because we are unaware of the downward risks that are presented by the global economy, nor because we think our economy is somehow immune to international problems. it was because we clearly have stronger domestic conditions in place already as a result of current policy settings ( not to mention higher inflation than most countries ), and hence have not had the same sense of urgency in reducing interest rates that several others clearly did. we are, however, very conscious of the risks the australian economy faces. obviously, the first one is that the world economy fails to recover and that, in time, this feeds through to a protracted weakening in the australian economy. the main direct channel through which this could occur would be a further weakening in exports. at the same time, we have seen that because our economy is healthy relative to others, and hence our interest rates are not as low as others, foreign investors have found australian dollar - denominated assets attractive to acquire. thus, a second channel could be through an excessive appreciation of the australian dollar. not that i think what has happened to date could be in any way labelled excessive. the trade - weighted exchange rate has returned to its post - float average, while the