some extent, an outcome of the euro area crisis. this crisis, which is actually a combination of at least three kinds of crisis – a sovereign debt crisis, a banking crisis and a balance of payments crisis – has been troubling european policymakers for more than six years now. solidarity among governments combined with bold fiscal and monetary policy measures helped to contain the crisis and prevent it from escalating. however, some of those measures have thrown the balance between action and liability out of kilter. while fiscal policy has essentially remained a national domain, liability has increasingly been transferred to the european level. in that state, however, monetary union becomes inherently unstable because the incentives are not aligned. the balance between action and liability therefore has to be restored if emu is to regain a more stable footing. but how can this be done? in theory, two options are viable. the first would imply a more centralised emu design with formalised elements of common liability. such a great leap in european integration towards a fiscal union would, however, mean constraining national sovereignty in fiscal affairs and transferring the respective control rights to the union level. such an initiative would need sufficient political backing and – in some countries – electoral approval. to be honest, i doubt this to be a realistic endeavour in the foreseeable future. the second option for realigning responsibility and control would be endorsing the original framework of the european monetary union, but fixing the shortcomings exposed by the crisis. the original framework, which was agreed in the dutch city of maastricht nearly 25 years ago, can be described in a nutshell as follows : shared responsibility for monetary policy ; national responsibility for fiscal and economic policymaking. important precautions were put in place to prevent unsound fiscal policies from damaging the stability of the single currency. those were the “ no - bail out ” clause, the ban on monetary financing and the deficit rules specified in the stability and growth pact. the problem is that these arrangements failed to prevent the sovereign debt crisis from erupting, and, unfortunately, market discipline did not help, either. the “ no - bail out ” clause, which prohibits a member state from assuming liability for another one ’ s debts, was expected to enhance market discipline. but as it turned out, it simply wasn ’ t credible enough. at least, markets did not adequately price in the risk of sovereign insolvency. what is more, the preferential treatment of sovereign borrow

established trading relationships ”. and i agree with the imf when it writes : “ negotiations on post - exit arrangements would likely be protracted, resulting in an extended period of heightened uncertainty that could weigh heavily on confidence and investment, all the while increasing financial market volatility. ” to keep such risks in check, it would be important – were britain to vote to leave – for the uk and the rest of the union to proceed quickly, and without animosity, to a constructive discussion framing their future relationship. introducing trade barriers can certainly not be in the interest of either party. 2. economic outlook : between recovery and new challenges on that note, let me now turn to the state of the economy in the euro area and in germany. having got off to quite a good start in 2016, the euro area economy is expected to see a resilient, ongoing recovery, supported by low energy prices and the accommodative monetary policy stance. the latest eurosystem macroeconomic staff projections predict that bis central bankers ’ speeches real gdp will grow by 1. 6 % in 2016 and by 1. 7 % in both 2017 and 2018. this means that aggregate economic capacity utilisation in the euro area as a whole may get close to normal levels by the end of the projection horizon. germany ’ s economy, meanwhile, experienced a strong surge in growth in the first quarter of 2016. real gdp was up 0. 7 %. aggregate capacity utilisation climbed to a multi - year high, boosting the willingness of german corporates to step up their investment again. private consumption and buoyant construction activity were the main forces driving economic growth, but, in contrast to the end of last year, renewed stimulus was coming from exports and foreign investment as well. while the economists of the bundesbank expected the german economy to lose some traction in spring, the solid underlying cyclical trend will probably remain intact. according to our june 2016 economic forecast, the german economy is predicted to expand by 1. 7 % this year, by 1. 4 % next year and by 1. 6 % in 2018. adjusting for the number of working days makes the growth rates even more uniform, and they are higher than the estimated increase in potential output, which is running at about 1. 4 % per year. the utilisation rate is therefore continuing to rise, and it is expected to be significantly up on the long - term average at the end of the projection horizon. however