essential to further strengthen and develop the single market. in the area of financial services we have made significant progress. the single market for financial services is now supported by the single rulebook for banks and by common supervisory institutions. within the euro area we went further with the banking union. as i have said, we are not at the end of this process. for instance, financial integration through a fully fledged capital markets union could diversify financing sources for european companies. by fostering private risk - sharing, it can also contribute to a more resilient european economy. conclusion let me conclude. it is encouraging to see that recent opinion surveys show support for european integration increasing since the uk referendum, contrary to the expectations of many. at the same time, there are lessons to be learnt. the key lesson is that the european union has to deliver on key objectives from the citizens ’ perspective if it is to rekindle trust in the european project. and to address the widespread feelings of insecurity, including economic insecurity, the european project needs strong economic foundations. for the euro area economy, this means strengthening the recovery, preserving financial stability and addressing the remaining vulnerabilities of economic and monetary union. thank you for your attention. i am now looking forward to our discussion. 3 / 3 bis central bankers'speeches

. let me stress a point which is often underestimated. what looks perfectly appropriate with the benefit of hindsight, moving down interest rates to such low levels – exploring secular uncharted waters – was indeed bold ex ante for a new institution, which in mid 2003 was exactly 5 years old – and for a new currency – that at that time was 4½ years old. it had not been done to that extent by either the fed or the bank of england! in retrospect, we have been bold and equally lucid. there is no doubt that the governing council used appropriate judgement in granting high weight to the decrease of inflationary pressures stemming from the downside risks to economic activity. and there is also no doubt that the resolute action of the ecb, based on its own inflationary analysis, not only permitted to stabilise inflation and inflationary expectations, but also helped to forestall a much deeper slowdown in the economy. the behaviour of inflation expectations brings me to the other episode i have mentioned. long - term inflation expectations, which had remained well anchored at levels in line with the ecb definition of price stability from the outset of monetary union in january 1999, started displaying signs of upward instability in the second half of 2003 after the last decision to decrease rates. the ten - year break - even inflation rate ( beir ) suggested an incipient rise in longer - term inflation expectations [ see chart 2 ]. survey - based data also revealed that the probability assigned to inflation outcomes being above our definition of price stability at long horizons was rising [ see chart 3a ]. movements in these indicators of long - term inflation expectations possibly reflected concerns that the policy stance was incompatible with the inflationary impact of the surge in oil prices, accompanied by a pick - up in economic activity and protracted conditions of ample liquidity, which could be seen as favouring spending propensities and granting firms increasing pricing power. 5 the rise in inflation expectations was considered very carefully by the ecb ’ s governing council. it was of utmost importance to regain control of these expectations. for all reasons that would be common to all central banks plus three which were peculiar to the ecb. first, as i have already explained, we had been bold in exploring new territory in the lower side of interest rates, and we had to dissipate any wrong sentiment in the markets that we could have neglected our main objective, namely price stability. second, we also had to eliminate