stanley fischer : past, present, and future challenges for the euro area speech by mr stanley fischer, vice chair of the board of governors of the federal reserve system, at the ecb forum on central banking conference “ inflation and unemployment in europe ”, sintra, portugal, 21 may 2015. * * * it is an honor and a pleasure to participate in the ecb forum on central banking, and i thank you, president draghi, and other members of the ecb board, for inviting me to take part. 1 although the topic of the conference is inflation and unemployment, i will take another perspective by discussing some of the past, present, and future challenges that have and may in future confront the ecb and the euro area. my theme is taken from jean monnet, who in 1976 wrote : “ europe will be forged in crises, and will be the sum of the solutions adopted for those crises. ” 2 this quote is discussed in the interesting recent paper by luigi guiso, paola sapienza, and luigi zingales, whose view of monnet ’ s contention can be deduced from the title of their paper : “ monnet ’ s error? ” 3 there are similar quotes from others, among them jacques chirac in 2003 and the former chief economist of the ecb, ottmar issing, in 2010. 4 i first heard a statement to this effect from jean - claude trichet at the 2011 jackson hole conference. 5 an extended 2015 version of the monnet contention would take the form : “ the first step on the road to european union was the creation of the coal and steel community in 1951. at the start, we did not have a road map, but we had the goal of ensuring that the countries of europe would never again go to war, and to that end, we had to build an institutional structure that would make another european war impossible. from time to time we encountered obstacles in that process. these obstacles often led to crises, but the crises were overcome, and from each crisis, the prospects for a united, prosperous, and peaceful europe emerged stronger. and that is what will happen this time too. ” i am grateful to brian doyle, jane haltmaier, stacey tevlin and paul wood of the federal reserve board for their assistance. the views expressed are my own and not necessarily those of others at the board, on the federal open market committee, or in the federal reserve system. see jean monnet (

of the economy heavily exposed to international trade. monetary policy has played a key role in achieving these outcomes through deferring liftoff relative to what was expected a little over a year ago. the october 2015 fomc statement indicated that it may be appropriate to raise the target range for the federal funds rate at the next meeting in december, though the outcome will depend on the committee ’ s assessment of the progress – realized and expected – that has been made toward meeting our goals of maximum employment and price stability. 10 of course, as policymakers, we must always be vigilant to events unfolding differently than we expect, and we must be ready to react accordingly. references board of governors of the federal reserve system ( 2014 ). “ minutes of the federal open market committee, june 17 – 18, 2014, ” press release, july 9. the sep is an addendum to the fomc minutes. for the june 2014 sep, see board of governors ( 2014 ). the september 2015 sep is available in board of governors ( 2015b ). for the october 2015 fomc statement, see board of governors ( 2015a ). bis central bankers ’ speeches — — — — ( 2015a ). “ federal reserve issues fomc statement, ” press release, october 28. — — — — ( 2015b ). “ minutes of the federal open market committee, september 16 – 17, 2015, ” press release, october 8. bussiere, matthieu, simona delle chiaie, and tuomas a. peltonen ( 2014 ). “ exchange rate pass - through in the global economy : the role of emerging market economies, ” imf economic review, vol. 62 ( 1 ), pp. 146 – 78. gopinath, gita ( 2015 ). “ the international price system, ” nber working paper series 21646. cambridge, mass. : national bureau of economic research, october. hofmann, boris, ilhyock shim, and hyun song shin ( forthcoming ). “ the risk taking channel of currency appreciation, ” bis working paper. loretan, mico ( 2005 ). “ indexes of the foreign exchange value of the dollar ( pdf ), ” federal reserve bulletin, vol. 91 ( winter ), pp. 1 – 8. yellen, janet l. ( 2015 ). “ inflation dynamics and monetary policy, ” speech delivered at the philip gamble memorial lecture,