and wages. the non - standard monetary policy measures include a zero – and even a negative – interest rate policy, a fixed - rate full allotment procedure to cover banks ’ liquidity needs ( provided they have sufficient eligible collateral ), targeted longer - term refinancing operations with a maturity of up to four years, various asset purchase programmes and forward guidance, through which the ecb governing council indicates the likely future path of monetary policy given the current situation. some of the crisis symptoms have now subsided and the threat of deflation has evaporated. the euro area economy is experiencing a sustained and broad - based recovery – but with regional variation. the ecb ’ s staff projection puts real economic growth at 2. 2 % in 2017 and at almost 2 % in 2018. however, inflationary pressure is increasing only gradually. although an accommodative monetary policy stance is therefore basically still justified to bolster the economic recovery and thus inflationary pressures in the euro area, at the same time, the current circumstances are opening up the possibility of a return to normal monetary policy. even if the net purchases under the asset purchase programme are ultimately discontinued, euro - area monetary policy would remain accommodative. after all, the deciding factor is not so much the amount of monthly purchases but, above all, the total volume of bonds purchased by the eurosystem. the reinvestment policy means that maturing bonds are replaced by purchases of new securities. so the monetary policy stimulus created by the asset purchases remains strong – it is just not being made stronger still. we call the gradual scaling back of the asset purchases “ tapering ". for the bundesbank, it is important that government bond purchases be phased out quickly due to their serious side effects. the problem with government bond purchases is that they have turned central banks into their countries ’ largest creditors. the line between monetary policy and fiscal policy is becoming increasingly blurred. governments ’ financing conditions depend much more heavily on the actions of central banks than in the past. this creates a proximity between governments and central banks that may threaten the central banks ’ independence. in the autumn, the ecb governing council will make decisions about the future monetary policy stance. it goes without saying that you will keep a close eye on these decisions and their effects. 2 / 7 bis central bankers'speeches 3. reforms of the economic and monetary union the ecb governing council has responded to the crises of the past few years by adopting non

##standard measures. the objective of these measures must be to restructure the monetary union in a way that prevents such crisis situations from reoccurring in future, thereby making it unnecessary to again resort to non - standard monetary policy measures. to achieve this, we need reforms. a clear analysis needs to be carried out before these reforms can begin : what triggered these crises? what reforms are necessary to prevent such crises from reoccurring? what form should these reforms take? a deepening of european integration is a project that is decided on at the political level. we are currently holding a broad debate on this issue. recently, french president emmanuel macron presented his reform plans in which he called for the euro area to be given its own budget and its own finance minister. he also put forward a number of other proposals, which included the creation of a parliament for the euro area, an eu unemployment insurance scheme, a european monetary fund and a common european deposit insurance scheme. but what reforms would resolve the actual problems in the economic and monetary union? we have to beware of falling into the trap of taking action for action ’ s sake, but focus on solving the actual core problems. the sovereign debt crisis has taught us that in a monetary union, state sovereignty in fiscal and economic policy decisions becomes problematic if the member countries do not abide by the commonly agreed rules of the game. two weaknesses became particularly apparent during the crises : first, the excessive debt levels of countries in the euro area ; second, the heterogeneous economic developments in the individual member states of the monetary union. 3. 1 sound public finances we must therefore begin by ensuring sound public finances. “ those who act must also bear the consequences of their actions ” – this has to be the basic principle behind the reforms of the european economic and monetary union. in some cases, the relationship between actions and liability was knocked - off balance during the crises when a number of elements of mutual liability were introduced, whilst, at the same time, keeping the sovereign powers of the member states largely unchanged. responsible decisions can, however, only be made if decision - makers are also held liable for the consequences of their actions. the bundesbank has made technical proposals in this regard which follow the basic principle of making those who take risks also responsible for the consequences. the first proposal envisages the possibility of extending the maturities of government bonds whenever member states need european rescue funds. this would ensure that bondholders do not