been made. most of our active members have been meeting a number of the macroeconomic convergence targets, as we continue harmonization and co - ordination of macroeconomic and monetary policies. we recently embarked on stage iii ( year 2009 – 2012 ) of the programme, whose successful implementation and assessment of macroeconomic performance will form a basis for the establishment of a continent wide common central bank. in addition hon. minister, the assembly of governors are working on a common strategy with regard to the establishment of the african central bank ( acb ) as well as advising on the formation of both the african investment bank ( aib ) and the african monetary fund ( amf ). the realization of these institutions will bring us closer to a continent wide monetary union. hon. minister and fellow governors, benefits of integration have been evident across the globe, including securing access to larger markets, enhancing trade flows and in the process attracting the much needed foreign direct investments, lowering trade costs among neighbours, leveraging or locking in domestic reforms, increasing bargaining power and political cohesion among others. notwithstanding these benefits, regional groupings in africa have tended to give less emphasis to monetary integration. under the amcp, the eastern africa sub - region central banks evaluate each other annually to ensure convergence in policies as we pursue further monetary integration. this meeting, hon. minister, will therefore consider the progress on the implementation of the african monetary co - operation programme ( amcp ) by the eastern africa sub - region countries in 2009 ; consider macroeconomic performance against the amcp targets and the status of execution of the decisions of the 8th meeting of governors of the sub - region held in moroni, comoros. my fellow central bank governors, ladies and gentlemen, with these few remarks it is now my humble duty to invite the hon. deputy prime minister and minister for finance to address and officially open this meeting. welcome hon. minister.

the face of coming demographic challenges, costly stimulus measures could even backfire via negative confidence effects. is the case for higher investment therefore completely without merit? no, but arguments in favour do not stem from cyclical considerations : they stem from structural considerations. where germany ’ s growth potential is concerned, there is agreement that higher public investment does have a role to play. with regard to the size of the investment gap, however, there is probably no agreement. it is important that all investment measures are judged on a case - by - case basis, as we have seen in the past that not all public investment measures have been money well spent. and we should focus on shifting priorities in public expenditures. there is no need for a debtfinanced fiscal stimulus, but for a structural shift of government expenditures from consumption to investment. reforming the financial arrangements between the federal, the state, and the municipality level could encourage that shift. somewhat more autonomy with regard to revenues might alleviate the problem of lacking funds to some extent. at the same time, however, it has to be ensured that the overall tax burden does not increase. bis central bankers ’ speeches 4. reforms for resilience ladies and gentlemen the reforms laid out so far, together with other widely discussed structural measures and sound public finances, would allow the euro - area economy to shift gears and accelerate. but they do not in themselves guarantee that the engine will run more smoothly and reliably. this is where reforms addressing the euro area ’ s institutional architecture come in. the euro area teams up one common monetary policy with 18 national fiscal and economic policies. this approach reflects a currency area composed of sovereign member states. it grants member states sufficient leeway to preserve their diversity, that is to establish their own business models or to tailor institutions and policies to their own national preferences. at the same time, it leaves the consequences of such decisions with the respective member state and consistently rules out the option of mutualising public debt with other euro - area states. but this set - up also creates vulnerabilities. first, a combination of this kind gives rise to a deficit bias, as it allows the costs of fiscal imprudence to be shifted partially on to others. an unsustainable fiscal situation in one country has repercussions for monetary union as a whole. you can compare this to what economists call the “ tragedy of the commons ”. just as overfishing creates negative externalities for other countries, excessive public debt harm