. the point that i would like to make is that – like in europe – monetary and political integration were lengthy processes that went hand in hand, processes that were much more complicated than some of these commentators would have us believe. moreover, in order to understand why europe has successfully introduced a single currency without being a nation - state, it is important to grasp the history and essence of the european integration process. having been the initiator and to a large extent the theatre of two world wars, european countries realised they could only avoid the horrors of another armed conflict by coming closer together. the strategy was, and still is, to link the countries of europe by gradually integrating their markets and economic policies. by doing so, political integration will follow. in 1968 a customs union was established among the countries of the then european economic community, followed by the establishment of a european single market in 1993. in order to make a single market, i. e. ensure the free movement of goods, services, capital and labour, it was felt necessary to introduce a single currency. and as you know, this most recent step in the european integration process occurred in 1999. its introduction was a logical step in an integration process that started after the second world war and which will ultimately lead to ever closer ties between the countries of europe. the euro area : a fairly homogeneous economic entity us commentators were also sceptical about the homogeneity of the european economies. a single currency would only be beneficial if the potential members of the monetary union were fairly homogeneous. if not, countries would no longer be able to adequately respond to diverse economic developments, as they could not let their exchange rates fluctuate. these commentators also argued that the european countries had no other adjustment mechanisms, such as a high labour mobility or fiscal stabilisation, which might serve as a substitute for exchange rate flexibility. however, in my view, there are very good reasons for having a single currency in those member states of the european union which have sufficiently converged. this is supported by the experience gained in the three and a half years since the introduction of the euro. first, economic research and empirical evidence has shown that countries in europe are not as heterogeneous as the critics of the euro project often claim. indeed, compared with the differences between the economic structures and business cycles of us regions, the european countries score relatively well. the research has also shown that a given region in the us will recover more quickly from an economic shock

policy support was corroborated by model - based evidence that suggests that a significant part of the rise in ten - year ois rates reflected global spillovers ( right chart, slide 11 ). against this backdrop, the governing council announced that we would significantly step up purchases under the pepp in the second quarter, in line with market conditions. conclusion let me conclude. preserving favourable financing conditions is a powerful policy response to the challenges we are currently facing. it is a strong commitment to protect an exceptional degree of policy accommodation for as long as needed. it signals our unwavering determination to offset the impact of the pandemic on the projected inflation path. and it is a promise to the people of europe that the ecb will do its part to mitigate the social and economic costs of this crisis. this promise is underpinned by a purchase envelope that is unprecedented in the history of the ecb. we will continue to deploy this envelope resolutely and efficiently, guided by our commitment to price stability. if favourable financing conditions can be maintained with asset purchase flows that do not exhaust the envelope over the net purchase horizon of the pepp, the envelope need not be used in full. equally, the envelope can be recalibrated if required to maintain favourable financing conditions to help counter the negative pandemic shock to the path of inflation. we will flexibly adjust our purchases over time and across asset classes and jurisdictions in a way that ensures favourable financing conditions for the entire economy and paves the path to recovery. thank you. 6 / 6 bis central bankers'speeches