stability, sustainable growth, and opportunity for employment. as joseph schumpeter said, money is a reflection of the condition of our economy and our polity. looking from that angle, reinforcing the monetary union is an integral part of a broader endeavour to strengthen europe. ladies and gentlemen, this is of paramount importance especially today, when the international role of europe as a key standard - bearer of democracy and the rules - based international order has become even more essential than it may have been some years ago. for politicians, my message is : instead of using political energy for drawing red lines to agitate the home audience, we ’ d do better by pursuing positive goals of reform and focusing on building bridges across europe. a stronger europe and a more stable monetary union are essential for both internal and external reasons. and these goals can, as in the football field, only be achieved in unity and by teamwork. this is a vision we can only achieve in dialogue and with support of the citizens of europe. meine damen und herren, europa wird nur auf einer starken vision, durch bruckenbauen und im engen dialog mit den burgern erfolgreich aufgebaut. 1 the ” parlemeter ” of october 2018. 5 / 5 bis central bankers'speeches

jobs in the euro area has now passed the pre - crisis peak of 2008, and the unemployment rate is continuing to fall. over 9 million jobs have been created since 2013. there has also been a significant improvement in public finances of the euro area as a whole, and also the bank balance sheets are now stronger than before. on the negative side, the convergence of the euro area price developments to our price stability objective is incomplete. for that reason, we still face the challenge of monetary policy normalization after a decade with non - standard measures. hence, we continue to aim at stabilizing inflation back to the target of “ below but close to 2 per cent in the medium term ”, so that we would be able to ensure ourselves with “ policy space ”, and thus be able to react to deflationary as well as inflationary shocks, by moving our interest rates as needed. such policy space would require higher interest rates on average than today, which will be possible when the european economy can sustain a clearly higher real interest rate than now, or when we see sustained convergence of inflation to the ecb ’ s definition of price stability, or both. the context has become more difficult recently. as you know, uncertainty about the future of the european recovery has increased in the last months – the risks to the growth outlook have moved to the downside. this is largely because of the weakening of the global economic cycle, which is felt in european exports, also in germany. the shadow of global trade conflicts and protectionism is hanging over the european recovery. not all risks are external, however : political uncertainties within europe have increased. a messy brexit, the worries about italian fiscal policy, and the recent french unrest, are among the sources of this uncertainty. all in all, my analysis is that the current situation requires patience and persistence in removing the monetary policy accommodation. perhaps paradoxically, this is necessary precisely in order to reach higher interest rates in the future in a durable way. if we were to tighten monetary policy too soon, the interest rate increases might turn out to be unsustainable, and we might end up being stuck back in the ultra - low interest rate situation for even longer time than otherwise. of course, we should not wait for too long either : an unnecessarily long period of inaction could trigger financial stability issues that the low interest rate environment may bring about, such overindebtedness in some sectors ; increases in real estate