that are fiscally prudent and prevent imbalances from emerging. prevention is key. coming back to greece, member states agreed in august to provide further financial assistance in exchange for a comprehensive reform programme. the conditions are now met for confidence and financial stability to return as soon as possible, provided that the programme is implemented swiftly. the health check by the ecb of the large greek banks is another step forward, and bank recapitalisation should be completed by the end of the year. do other countries worry you? the situation in the euro area is considerably more robust than it was a couple of years ago. financial conditions have improved thanks to ecb measures ; governance has been strengthened and we have instruments to maintain stability that we didn ’ t have a couple of years ago. banking union delivers strong banking supervision. finally, reforms in various countries such as spain and italy have already started strengthening those economies. that is why our recovery is now solid, and the main risks to it come from outside of europe. is there a before and after for the euro area following the greek crisis? policy - makers are learning that being part of the single currency comes with benefits but also with responsibilities. monetary union is not a technical enterprise : it is a political project. a stable monetary union requires convergence in economic performance, sound national policies and a sense of shared responsibility, with common instruments. a lot has been achieved already but we ’ re not yet at the end of this process, as the “ five presidents ’ report ” ( signed by the european council, european commission, eurogroup, ecb and european parliament presidents ) demonstrated earlier this year. bis central bankers ’ speeches what ’ s the outlook for the year ahead? the first thing we want to achieve is price stability and that means maintaining trust in our capacity to raise inflation to close to 2 % over the medium term. that ’ s our priority. a second one is to continue the construction of banking union by delivering strong and harmonised supervision across the 19 participating countries. bis central bankers ’ speeches

than a monetary arrangement. as hans tietmeyer said many years ago, the monetary union is a community that shares a common destiny. and we should not forget that we are also a community of values. price stability is the best contribution that central banks can make to the stability of the financial system. price stability is even a necessary condition for financial stability. however, price stability is not a sufficient condition. many people share responsibility for financial stability, and all must live up to that responsibility. the crisis has revealed weaknesses in the institutional framework. thus far, it has not been sufficiently possible to encourage the member states to implement policies that are in line with our benchmark. fiscal policies, wage policies and structural policies must conform to our stability target of inflation of just under 2 %. i am convinced that we will find ways of achieving this. conclusion before i finish, i should like to recount a short anecdote. once, while raymond barre was prime minister [ 1976 – 1981 ], he asked me, given that i worked at the treasury, whether i often travelled to brussels. in that case, he said, i must meet hans tietmeyer. he said : “ he is very influential, and he is a tough negotiator. if you have issues to discuss with him, good luck! ” that was a considerable compliment. germany and europe have much to thank hans tietmeyer for. he was resolute in ensuring that the euro would be a stable currency. today, after having had to cope with the worst financial crisis since world war ii, we can say with confidence that the euro has been a stable currency since its inception and that the euro area is a stable community. as i said earlier, hans tietmeyer is the author of a book entitled “ the euro challenge ”. i am certain that the euro will be equal to that challenge. thank you.