the uk as a whole, and just about the lowest in nearly every region. this is not just past history. having come through the global economic slowdown a year or two ago, the economy as a whole is now again growing at well above trend, with inflation a bit below target ; and the broad prospect for the next couple of years - on most forecasts, including the mpc ’ s february forecast based upon our collective best assumptions - is for continuing relatively strong growth with relatively high employment and relatively low inflation. the policy debate for the time being remains - as i ’ ve said before - a comparatively narrow one about just how strong the growth, how high the level of employment and how low the rate of inflation. in terms of the economy as a whole, i ’ m tempted to rest my case. our problem - and it is a real problem, as we have recognised for some time - is the imbalance, within the overall economy, between the domestically - oriented businesses and sectors, and those that are most internationally exposed. in part that imbalance is a hangover from the earlier global slowdown - though the welcome recovery in global demand means that this influence is now diminishing. the more important factor now is the persistent weakness of the euro - not exclusively against sterling but equally against the dollar and the yen. the impact is particularly severe on the uk because of the closer ties between our economy and that of the euro zone. i ’ ve not heard a wholly convincing explanation for the euro ’ s persistent weakness. many analysts relate it to market concerns about structural rigidities in some parts of the euro zone, which are encouraging direct capital outflows attracted elsewhere by higher prospective earnings growth. whatever the cause, few of those i talk to expect it to persist. but in the meantime, given that the problem is a general weakness of the euro rather than any particular strength of sterling, it is very difficult to see what we can do directly to resolve it. the weak euro affects us at the macroeconomic level in two ways : it has a dampening effect on our price level ; and it reduces net external demand on our economy. to offset these influences - to prevent overall demand growth falling short of underlying capacity growth, causing inflation to fall significantly below our 2½ % target - and i remind you it is a symmetrical target - we have had to keep interest rates lower than would otherwise have been necessary, in effect encouraging stronger domestic demand growth, to keep the economy as a whole

nicholas c garganas : the euro and greece dinner speech by mr nicholas c garganas, governor of the bank of greece, on the occasion of the ecb governing council meeting hosted by the bank of greece, athens, 8 may 2008. * * * your excellency mr prime minister, president of the european central bank, speaker of the parliament, minister of economy & finance, commissioner, dear colleagues and friends, it is a great pleasure to welcome you to greece on the occasion of today ’ s meeting of the ecb ’ s governing council. let me say a few words about the location of tonight ’ s dinner, the zappeion hall. it was built in the second half of the 19th century as a center to host cultural exhibitions modeled after the crystal palace exhibition hall that was part of first world ’ s fair, held in london in 1851. the architecture is neoclassical, with a corinthian portico, and an organization of spaces that is fully in harmony with the purpose for which it was built. the building, inaugurated in 1888, was used as the olympic village for the first of the modern olympic games in 1896. the building also has a rich political history. in 1979, the signing of the treaty of accession of greece into the european economic community took place here. the meetings of the governing council that take place outside of frankfurt twice a year serve an important function. these meetings allow the governing council to conduct its normal work activities while strengthening the cooperation and relations among our respective institutions. the meetings underline the cohesiveness of the eurosystem and serve as a reminder that the system belongs to all euro - area citizens. intimate cooperation among the members of the eurosystem team, the national central banks of the system and the ecb, is the key to the success of the single monetary policy of the euro area. in this regard, let me mention that, as a member of the eurosystem family, the bank of greece has enjoyed excellent working relations with all the members of the eurosystem over the years. the euro has been a major success in so many respects. despite the skepticism that surrounded its birth, on june 1st the ecb will celebrate its 10th anniversary, with its standing high. at all levels, the euro has delivered the goods. at the level of economic performance, its creation was intended to promote a macroeconomic environment in which countries could thrive in an increasingly competitive market place. the euro area ’ s track record in terms