conference calls upon us to assess these first two decades of the euro as well as to reflect on its future : 1. which are the main challenges ahead? 2. how should emu evolve? 3. what should we aspire for the future role of euro at the global level? these are very important questions, which we must all reflect upon in order to contribute to further strengthening the european project, bearing in mind the profound and rapid changes, at all levels, that have been taking place in the world in the last few years. in the current globalised, competitive, digitalised and interlinked environment, there is an increased need for euro area countries to work together to exercise sovereignty and make their voices heard. we should always bear in mind that sharing sovereignty is not a synonym of loss of control or power. internal cohesion and “ teamwork ” will help protect member states from external pressures and spillover effects, and empower their policy choices. member states must therefore persist in working together in a committed way to continue the journey that started in 1999, so that european citizens can fully reap the benefits of their common currency. cooperation within emu will also support an increased role of europe and the euro in the world. i am sure that today ’ s discussion will be very fruitful and will bring new, good ideas to help equipping the euro area with the tools it needs to withstand headwinds and to prosper. quoting robert schuman : “ europe will not be made all at once, or according to a single plan. it will be built through concrete achievements which first create a de facto solidarity ". and it goes without saying that solidarity must go hand - in - hand with responsibility, which entails rules and mutual surveillance institutional mechanisms. before giving the floor to jean - claude trichet, i consider it both an honour and a duty to underline the important role he has played at several stages during the emu creation and consolidation process, notably in the pre - maastricht political negotiations and as president of the ecb. dear jean - claude, the floor is yours. thank you. 1 speech by mario draghi, president of the european central bank, at the session of the plenary of the european parliament to mark the anniversary of the euro in strasbourg, 15 january 2019. 2 for a survey of literature on oca theory see dellas, h. and tavlas, g. s. ( 2009 ), “ an opt

of the programme ( index = 100 at t - 1 and data is in real terms unless stated otherwise ) source : banco de portugal bis central bankers ’ speeches the behaviour of the external component was not enough however to offset the impact on gdp of the contraction in domestic spending. indeed, domestic spending fell more than in previous programmes, with the clearest difference appearing in the behaviour of private consumption ( figure 2 ). the current significant reduction in household spending reflects the contraction of disposable income, the impact of the restrictions on access to credit and the effect of high indebtedness on the ability to smooth consumption. furthermore, the disappearance of the money illusion has contributed to a downward revision in expectations of private agents ’ permanent income, which has accelerated and amplified the impact of the policy measures on domestic spending. indeed, in previous adjustments, the money illusion has allowed a great, silent redistribution of wealth : the holders of monetary assets and those with fixed incomes lost purchasing power, but as nominal income rose, they did not notice right away – and far less anticipated – the loss in real terms. in a “ numb ” process of this kind, the reaction of private demand tends to be less intense and immediate than in a process in which the general public observe that their income is falling. and so it is not surprising that in the current context, the multipliers – which are a measure of the conversion of a stimulus into an effect – are larger than expected initially. the perception of the more permanent nature of the adjustment is also visible in the behaviour of the saving rate, which increased more than in the 1977 and 1983 adjustments. the strong contraction in domestic demand, along with the adjustment of the previous imbalance in the productive structure – oversized non - tradable sector relative to the tradable sector – resulted in a more marked increase in unemployment. a very significant proportion of unemployment is structural in nature, given the size and lasting nature of the fall in demand affecting various non - tradable sectors, such as property and construction. figure 2 comparison with previous financial assistance programmes : domestic spending trend gdp unemployment ( change in p. p. ) 5, 0 4, 0 3, 0 2, 0 1, 0 0, 0 t - 1 t t + 1 t + 2 t - 1 t t + 1 t + 2 household saving rate private consumption ( change in p. p. ) - 1 - 2 - 3 - 4 - 5 t - 1 t t + 1 t +