. so as things stand right now, there is no reason to worry about the euro area recovering in 2015 and 2016. mind you, all these factors are short - term. one possible concern is the ability to boost the potential growth of the euro area, which has been hit hard by the crisis. that ’ s more a long - term issue, though. aren ’ t you afraid that one of the effects of qe will be to create price bubbles for certain assets? does the ecb have the means to combat these side effects? our actions do have an impact on asset prices ; you just have to look at the way markets have risen since the public asset purchases started. we monitor risks to financial stability very closely : tommaso padoa - schioppa used to say this was in central banks ’ dna. but let ’ s not forget that the objective of monetary policy is price stability. financial stability involves different tools. as far as we are concerned, it ’ s a question of bank regulation and “ macroprudential ” tools. there is one effect you didn ’ t mention : this policy cuts governments ’ interest rate costs and potentially gives them room for fiscal manoeuvre again. that is not our objective. monetary policy serves to guarantee price stability and support the productive economy. where countries have room for fiscal manoeuvre, lowering rates bis central bankers ’ speeches increases the scope that can be used to support growth, particularly by increasing investment. where countries do not have this room for manoeuvre, such as france, my advice would be to use the lower rates to lend credibility to debt reduction, rather than to increase spending or cut taxes. however, that ’ s not a matter for the ecb to decide. it ’ s the european commission that is the guardian of the fiscal policy framework in the euro area. would you say that qe is helping immunise the euro area against the risk of an exit by a member state, even if this is not its objective? i wouldn ’ t put it like that. it is certainly reducing the risk of contagion in the euro area, but the context right now is very different from 2012. the problem for countries such as portugal, spain and ireland is no longer an exit from the euro area, far from it. their main concern now is how to capitalise on the return of growth in order to step up the reduction in unemployment and return to normal as quickly as possible. i am

supply from the agricultural sector, will reduce the saving rate and the resulting domestic funding of investment. it will probably also bring about wage increases that impinge upon the cost competitiveness of chinese exports. finally, historical experience with industrialised economies also tells us that the marginal return on capital diminishes as countries grow richer and accumulate more capital per worker. this means that in china a transition is needed from an economy driven by growth in factor inputs to one driven by efficiency and productivity improvements. the declines in these long - term structural factors are a fundamental reason why economic reforms are also very important in china, even if in the short run these developments may not result in immediate challenges to the long - standing economic model. the chinese authorities have, however, identified other, partly related developments – the emergence of domestic and external imbalances – as key factors calling for more urgent reforms. first, the share of private consumption in gdp has declined further. in the first nine months of 2010 the contribution made by consumption to gdp growth fell to 34 %, down from the pre crisis average of 39 %, while the contribution of investment picked up to stand at 59 % ( against a pre - crisis average of 49 % ). second, overcapacity in some segments of the economy and the limited efficiency of capital – especially in the public sector – have been additional sources of concern. more than half of the rmb 4 trillion stimulus enacted during the financial crisis has resulted in investment in public infrastructure, which has further increased the already sizeable role played by the public sector in the economy. third, the share of the service sector in gdp has remained small. given that the service sector is considered to be the most labour - intensive of the three major sectors, its underdevelopment has had negative implications for overall employment. fourth, income inequality has been on the rise. average urban income is now three times higher than average rural income. and the income gap between urban households with high incomes and those with low incomes has also been increasing. of course, given the complexity of the structural reforms involved, china cannot become a consumption economy overnight. this will take time. and for this very reason it is important to start now in order to ensure that the transition process is as smooth as possible. however, the benefits of these structural reforms could be substantial. to give you an idea of just how substantial, i would like to quote a recent study by the asian development bank 1. it estimates that without policy reforms china