constituency opposed to free trade which, in many cases, was able to develop convincing narratives for the continuation of protectionism even when the crisis was over. institutions provide stability by their very nature of being hard to change. but that inertia can lead them to lack the agility to deal with new challenges. failure to react can fertilise counternarratives. but there is also a chance for new institutions to be founded which improve on previous institutions. the federal deposit insurance corporation was created in the united states in 1933 to reduce the effect of failed banks on depositors. following the recent financial crisis, the international institutional architecture was strengthened with the inauguration of the g20 summits and the creation of the financial stability board. in the euro area, the establishment of the single supervisory mechanism and the single resolution mechanism has strengthened the financial system and made it more resilient to future shocks. while the current multilateral framework has so far protected against rising protectionist sentiment, it is worth recognising that anti - globalisation and anti - establishment sentiments have not disappeared. there is an increasingly common belief that the benefits of globalisation have not been distributed widely enough and that it has reduced protection for workers. let me take a few moments, then, to remind you of the successes of the post - war institutions in europe. 5 / 7 bis central bankers'speeches the european union as provider of stability and protection the european union and the single market have successfully delivered decades of peace and growing prosperity throughout europe. there has been a steady process of strengthening trade and economic links, based on the foundations of democracy, a strong social model and the rule of law. these institutions are europe ’ s answer to the questions posed by globalisation, a democratic way to reap the benefits of economic integration while still protecting consumers and workers. the single market is more than just a customs union or a dense network of free trade agreements between countries. it is in fact an innovative forward step in economic evolution. it provides the legal framework for trade between member states, underpinned by the four fundamental freedoms – free movement of goods, services, labour and capital. this framework is vital to give companies confidence to invest and integrate across national borders. for trade to flourish, businesses need to be certain that contracts will be honoured, competition rules will be fairly enforced, property rights respected and standards adhered to. in ensuring the rule of law, the single market reduces barriers to trade, labour mobility and competition and increases

will be brighter once current institutions are swept away and are acting coherently with that world view. history has proven that accidents are possible, that protectionism can succeed periods of free trade. we should all be wary of the filters that our own narratives put on our ability to process information. brexit proves that there is a possibility for european integration to go into reverse. a more widespread reversal of european economic integration would durably jeopardise economic prosperity. let me end on one final comment. the success of our monetary policy measures throughout the crisis has laid the ground for a new narrative, that of the ecb being the “ only game in town ”. we have proven able and willing to take the measures necessary to support a sustained adjustment of the path of inflation back to our objective. this new narrative deserves a word of caution : there is only so much monetary policy can do. monetary policy alone cannot ensure all macroeconomic goals are met. it cannot by itself bring about any redistributive measures required to bring the benefits of globalisation to all. a greater contribution is required from other policies. structural reforms are also required to build resilience to country - specific shocks and ensure the full diffusion of innovation across the single market to maximise the benefits to all citizens. carrying out these reforms will continue the decades - long progress of european economic integration and ensure that the benefits of stability and protection will be maintained in the future. 1 for a more detailed discussion of the economic impact of uncertainty, see “ the impact of uncertainty on activity in the euro area ”, economic bulletin, issue 8 / 2016, ecb and “ uncertainty about uncertainty ”, speech by kristin forbes, external mpc member, bank of england, 23 november 2016. 2 this measure is derived from a method proposed by baker, s., bloom, n., and davis, s. ( 2015 ), “ measuring economic policy uncertainty ”, nber working paper series no 21633. 3 european commission, european economic forecast, winter 2017. box 1. 2 “ a ‘ new modesty ’? level shifts in survey data and the decreasing trend of ‘ normal ’ growth ”. 4 trade developments in 2016 : policy uncertainty weighs on world trade by constantinescu, c., matto, a., and ruta, m. 5 on the importance of inclusive institutions, see acemoglu d. and j. robinson ( 2012 ), why nations fail : the origins of power, prosperity