jean - claude trichet : testimony before the committee on economic and monetary affairs of the european parliament introductory statement by mr jean - claude trichet, president of the european central bank, brussels, 23 may 2005. * * * madame la presidente, mesdames et messieurs les membres de la commission economique et monetaire, je me rejouis de paraitre devant votre commission aujourd ’ hui et de poursuivre ainsi notre dialogue regulier. vous connaissez le role important que jouent nos rencontres trimestrielles dans le contexte de la responsabilite de la banque centrale europeenne vis - a - vis nos citoyens, responsabilite a laquelle, comme vous le savez, la bce attache beaucoup d ’ importance. je commencerai mon discours avec une evaluation de la situation economique et monetaire. aus anlass des unlangst erfolgten beitrittes von drei neuen mitgliedstaaten zum wechselkursmechanismus ii mochte ich sodann auch kurz zu diesem thema stellung nehmen. economic and monetary developments recent data confirm that some of the downward risks to economic growth identified in the past, in particular those related to persistently high oil prices, have partially materialised over the last few months. according to eurostat ’ s flash estimate, real gdp rose by 0. 5 % quarter on quarter in the first quarter of 2005. while this compares favourably with the 0. 2 % increase observed in the previous quarter, the apparent improvement largely reflects technical factors related to working day adjustments to the data. taking those factors into account, the recent available indicators of economic activity suggest that the modest growth observed in the second half of 2004 will continue in the first half of 2005, with no clear signs as yet of a broadening or strengthening of the growth dynamic. looking further ahead, investment is expected to continue to benefit from robust earnings, improvements in business efficiency and very favourable financing conditions. on the external side, euro area exports should continue to benefit from global economic growth. accordingly, we expect continued, relatively moderate economic growth in the euro area in 2005 and 2006. this picture is broadly in line with available forecasts from international and private sector organisations. the

according to statistics sweden, population growth in the years ahead will be less favourable from a labour force perspective than it has been up to now. the number of people of working age will indeed continue to rise but by an increasingly smaller amount. this is because the number of people entering retirement in the years ahead will rise sharply. in particular, large numbers of the 1940s generation will start to retire in a few years. this could have a negative impact on potential growth. over the coming 10 - year period, the number of people over 65 years of age is estimated to rise by 270 000 - some 1. 6 per cent per year on average. between 2012 and 2030, this group will increase by around 1. 3 per cent per year. the number of people of working age is forecast to rise by 170 000 over the coming 10 - year period, i. e. by only approximately 0. 3 per cent per year. between 2012 and 2030, the increase in the working age population is estimated to average 0. 05 per cent per year, which in effect amounts to stagnation. in all, this means that measures will need to be taken to boost the supply of labour in the years ahead. these could be achieved by reducing the numbers on sick leave and if fewer people were to take early retirement. the trend also implies greater demands on people to enter working life at an earlier age and on increased labour force participation among the elderly. moreover, we currently have an unutilised labour force reserve in the form of our immigrant population. the employment rate among this group averages about 30 per cent lower than that of native swedes. measures to improve integration of immigrants into the labour market could make a positive contribution to the labour supply. for example, growth in the number of hours worked could be 0. 4 percentage points higher per year up to 2008 if the government ’ s target of halving sick leave were to be attained. furthermore, if the labour reserve represented by our immigrant population were to be utilised, the number of hours worked could rise further. if this reserve were to be utilised to the same extent as native swedes, the number of hours worked could rise an additional 0. 1 percentage points. this would have a positive impact on potential growth. heavier burden on the public finances as i mentioned initially, it is important that monetary policy and the wage formation process are efficient and that the central and local governments manage their finances in a satisfactory way. the change in the population