rates. so what are the challenges to economic policy? although no short - term economic measures are called for, significant structural challenges are waiting in the medium and long term. our life expectancy is longer, which is good news, even though it is often presented as a problem. nonetheless, the consequence is that the demand for welfare benefits will rise. greater affluence will also make us demand more in terms of the quality of these services. moreover, in years to come more people will retire from than join the labour force, while many groups would like more time away from work. there is no obvious way of reconciling these aspirations. the government has therefore set up a welfare commission to investigate all of these issues. before the commission ’ s reports are published i would like to take this opportunity to express the hope that all groups of society : the business community, stakeholder organisations, politicians and ordinary citizens, will read the reports with an open mind towards discussing the issues raised. we need a serious debate without avoiding or skirting these issues. pointing to other countries that face even bigger problems is not the solution either. at a time when the economy is flourishing and no short - term measures are required it is important that we make a start on debating the long - term economic structures.

exchange controls to money supply management under floating exchange rates, the swiss national bank 1907 – 2007. bis central bankers ’ speeches further monetary policy expansion in the euro area ( from mid - 2014 ) now we come to the third phase, shaped by quantitative easing in the euro area. economic recovery in the euro area was slow, although the ecb ’ s promise in july 2012 to do everything necessary to preserve the euro greatly reduced market uncertainty. while the economy was tentatively getting back on its feet, inflation in the euro area dipped below 2 % at the end of 2013 and continued to fall from there. at the beginning of 2015, it slid into negative territory, giving rise to concerns about whether inflation expectations were well anchored ( cf. chart 13 ). in june 2014, the ecb lowered its main refinancing rate to 0. 15 % and its deposit rate to below zero. today, they are at 0. 05 % and – 0. 3 % respectively. in lowering the interest rate into negative territory, the ecb followed the example of danmarks nationalbank, which had already introduced negative deposit rates for banks in 2012. the primary goal of the ecb was, however, not the same as that of denmark ( which was to reduce capital inflows ) ; instead, it sought to increase inflation by stimulating lending. 6 from mid - 2014, the ecb sent ever clearer signals that it would be substantially easing its monetary policy. at the same time, there were increasing signs that the us federal reserve would be exiting its zero interest rate policy. against this backdrop, the euro began to depreciate considerably not only against the us dollar, but also against the pound sterling. between mid - 2014 and the beginning of 2015, the euro lost almost 15 % against the pound and more than 20 % against the us dollar ( cf. chart 14 ). a phase of general euro weakness set in. finally, on 22 january 2015, the ecb announced a quantitative easing programme going well beyond market expectations in terms of length, target volumes and the wide range of the securities eligible for purchase. the euro lost even more ground against the us dollar and the pound sterling. for its neighbours, the ecb ’ s monetary policy easing had both positive and negative effects. on the one hand, the measures promised to support economic recovery in the euro area, which, thanks to real economic linkages, would also benefit neighbouring states. on the other hand, as with the us dollar and the