, the introduction of foreign currency - providing operations. these extraordinary policy measures represented the ecb ’ s response to extraordinary shocks. they have ensured adequate provision of liquidity to the euro area banking system at favourable conditions, so as to support the provision of credit to households and firms and thereby contribute to the revival of the euro area economy. as a consequence of these ample liquidity conditions, the eonia rate is set close to the deposit facility rate, i. e. 0. 25 %. euro area governments also responded to the crisis with exceptional measures. first, euro area governments committed substantial public funds to support individual financial institutions and help stabilise the financial sector. support came in various forms, in particular recapitalisations, the setting up of “ bad banks ” to remove toxic assets from balance sheets, and the guaranteeing of interbank lending, deposits and bond issuance. secondly, euro area governments have used ( or at least allowed ) fiscal policy to support economic activity through the crisis. in 2007, the euro area government deficit ratio was just 0. 6 % of gdp. in all likelihood, the euro area deficit reached around 6 % of gdp last year and is likely to remain around this level or even rise closer to 7 % this year. this is a significant fiscal impulse. the rationale behind euro area monetary and fiscal policies during the crisis let me now move from facts to their interpretation. in doing so i will have to be selective, focusing on aspects related to the conference theme of monetary and fiscal interactions as well as on aspects reflecting the specific architecture of emu. monetary policy focusing first on monetary policy, let me take as a starting point for my reflections an observation made in a recent overview bis paper by claudio borio and piti disyatat ( 2009 ). borio and disyatat argue that the unprecedented responses of the world ’ s major central banks to the crisis have two distinct types of action in common, namely, interest rate policy and balance sheet policy. to stress this broad commonality is important : from the onset of the crisis all major central banks shared a broad consensus that an extraordinary monetary policy response was necessary. and this response went beyond interest rate policy. let me cite a few numbers for the euro area, which serve to illustrate what is meant by the term balance sheet policy. in summer 2007, before the crisis, the total assets of the consolidated balance sheet of the eurosystem stood at eur 0. 9 trillion.

to the commission and council in the context of the stability and growth pact. but a plan or a target is one thing ; delivering it is another. in the past, the track record of some euro area governments in actually delivering promised fiscal consolidation has been mixed. this has created a credibility gap as far as euro area fiscal policies are concerned. conclusions to conclude, it is therefore essential that consolidation targets are reflected as soon as possible in specific, detailed tax and spending plans. credible and detailed fiscal adjustment plans should reassure investors, creating a more favourable, long - term financing environment. credible and detailed fiscal adjustment plans should provide certainty for households making their saving and investment decisions. credible and detailed fiscal adjustment plans would also facilitate the task of monetary policy in maintaining price stability, while gradually returning to a more normal, post - crisis monetary environment.