annual inflation rate in the euro area over the past 12 years has been 1. 97 %, and in germany only 1. 5 %. the average annual inflation rate in germany in the 1990s prior to the introduction of the euro was 2. 2 %. in the 1980s it was 2. 8 %, and in the 1970s it was even higher. zeit : it has been like that in the past, but will it be like that in the future? trichet : it has been like that in the past, despite the fact that we have had to cope with difficult challenges over the last 12 years, because the governing council of the ecb has taken the appropriate decisions. and we are determined to always take the necessary decisions. but on top of that, we need a quantum leap in terms of economic governance : better coordination between countries, clear rules for economic policy and sanctions for misbehaviour which are as automatic as possible. some major changes must be made here. that ’ s the lesson of this crisis. before it erupted, governments thought they could practise benign neglect. now it is obvious that that is no longer the case. and we are telling them that. zeit : what happens to democracy if more and more decisions are taken in brussels? the eu does not have the legitimacy that a nation state has. trichet : it is true that a functioning economic and monetary union presupposes that part of the sovereignty of the participating countries is exerted at the level of the union. it is obvious as regards monetary policy, which is a single policy decided by the governing council of the european central bank. but it is also true as regards fiscal policy. the stability and growth pact, with its sanctions, constrains budgetary decisions and therefore limits national sovereignty in terms of fiscal policy. as long as the transfer of sovereignty to european institutions has been decided by our own democracies, it is fully legitimate. zeit : and we ’ ll end up with a european super - state? trichet : the people of europe will decide where they want to go in terms of the political and institutional framework. they will decide whether or not to create a fully fledged federation, a united states of europe. but we are a long way from that at the moment. zeit : for you personally, that ’ s not fast enough, is it? trichet : speaking as a european citizen and not as president of the european central bank, i am convinced that

we should go further than planned. but in any case, we should never forget that it is our people who will decide. the concept of modern state sovereignty was devised in europe. it goes back to the peace of westphalia, which reorganised the continent bis central bankers ’ speeches politically after the thirty years war. with the european union, we are drawing up a new concept : together, a number of sovereign states have decided to exert part of their sovereignty at the level of the european union. this is the current european response to a question which is not just european, but global, with the rapid integration of global finance and the global economy. zeit : the scepticism felt by many people also has to do with their fear of inflation, which recently has risen sharply. are we now paying the price for the crisis policy? trichet : the one has nothing to do with the other. we are observing a global increase in the prices of oil and commodities. that ’ s a result not of the crisis, but of the current rapid economic recovery in emerging markets. zeit : so you will have to raise the interest rate? trichet : as i said at the last two press conferences in january and early february, all observers know that we will always take the decisions necessary to deliver price stability in the medium term. what is essential is to avoid what we call “ second - round effects ” : namely a situation where a transitory oil shock becomes entrenched in other prices, particularly through a wage - price spiral. zeit : in the 1970s such a spiral of increasing wages and higher prices led to inflation getting out of control. how will you stop history from repeating itself? trichet : a central bank must do this – and can, if it is credible and takes the appropriate decisions. the last 12 years have seen prices surge in commodity markets time and again. we have ensured price stability by taking the necessary decisions. zeit : even if you continue to do so, this will not solve the problem of increasing commodity prices. trichet : first, we, as central bankers, are responsible for avoiding second - round effects. but the international community is not powerless when faced with such global phenomena. people in large emerging economies are changing their consumption patterns, which is fuelling food prices. it is quite possible that this will continue for a while longer. however, at the same time, there are huge expanses of land in africa which could be used for agricultural