axel a weber : heterogeneities within the euro area – a problem for the single monetary policy? speech by professor axel a weber, president of the deutsche bundesbank, at the society of business economists annual dinner, london, 9 march 2011. * 1. * * introduction ladies and gentlemen first of all, i would like to thank you for inviting me to give the dinner speech tonight. i would like to use this occasion to talk about heterogeneities within the euro area. obviously, there are several dimensions of heterogeneity to consider, say, in terms of growth, inflation or market interest rates. with respect to economic growth, which usually receives a particular amount of intention, we are seeing a strong economic recovery in some countries, particularly in germany. by contrast, some countries at the geographical periphery of the euro area are suffering from persistent structural problems. whether or not this poses a problem for the ecb governing council is something i shall discuss later on. but firstly i would like to take a look at the german economy and the economic conditions in the economies at the periphery of the euro area. 2. germany : strong economic recovery germany was among the countries that suffered most from the economic crisis. in 2009, its economy shrank by 4. 7 %. this has to be borne in mind when considering last year ’ s growth figure of 3. 6 %, which was one of the highest both in the euro area and within the group of the major advanced economies. even so, the strong rebound in 2010 came as a surprise to many observers. gdp growth went down slightly to 0. 4 % in the final quarter of 2010, after 0. 7 % in the third quarter and an exceptional second - quarter figure of 2. 2 %. even so, the cyclical upswing is still intact. the most recent figure is biased to some extent by the heavy snowfalls and extremely cold weather in december. in line with this picture of a stronger underlying dynamic, leading indicators suggest a rather favourable outcome for the first quarter of 2011. moreover, the upswing has recently gained in breadth. the previous economic upswing was driven mainly by strong external demand, but ended incomplete. unlike then, external impulses are now exerting a greater impact on domestic activity. corporate investment has increased significantly. capacity utilisation is continuing to rise and is now back at its longterm average. as a result, firms are becoming more and more willing to expand

, has taken the initiative to improve the cross - border trading of securities within the eu. target2 - securities is the name of a new common european system for settlement of securities denominated first and foremost in euro, but later also for settlement in other currencies. the objective of the project is to make it just as simple, inexpensive and efficient to settle securities trades across national borders within the eu as it is to settle domestic trades. at the beginning of 2008 the ecb is expected to take the final decision on whether to develop the system. the user requirements of the system will be determined in the near future. danmarks nationalbank and vp securities services have commenced the collection and coordination of the danish input to the user requirements. i would like to conclude by on behalf of danmarks nationalbank acknowledging the excellent cooperation with both the association of danish mortgage banks and its members over the past year.