abbado, and i am also very much looking forward to this year ’ s opening concert by one of france ’ s most renowned baroque ensembles, les talens lyriques. this is the tenth year of the european cultural days. what do you think makes this cultural initiative a success? without the support of our longstanding partners and sponsors, not to mention our loyal audiences, such an initiative would be difficult to bring to fruition. our well - established partnerships with the city of frankfurt, reliable sponsors, local cultural institutions and our media partner hr2 - kultur have enabled us for many years to present a unique insight, each autumn, into the contemporary culture of a different eu member state. two years ago, together with our longstanding partner, the city of frankfurt, we began a new project : the charity concert of the european cultural days. under the heading “ a bis central bankers ’ speeches concert for you ”, artists perform for a good cause ; this year ’ s concert will be given by musicians from “ le cercle de l ’ harmonie ”. entry to the concert is free, but audience members are asked to give donations for a selected frankfurt - based charity. this year, we will be supporting the work of “ die frankfurter lesepaten ”, whose volunteers help primary school children from various cultural backgrounds aged 6 to 10 years to learn german. in choosing this charity, we would like to promote language acquisition – one of the most important factors for integration – and tolerance towards other cultures. this is in line with the underlying principle of the european cultural days : “ unity in diversity ”. bis central bankers ’ speeches

be of interest to you, also to underline how complex and sometimes irrational these markets tend to behave. last week - end the euro area member states agreed on the procedure, mechanism and financial amount to support greece in its fiscal adjustment programme, with a defined burden sharing mechanism and non - concessional pricing scheme. this will enable greece to implement its adjustment programme without loosing market access and ensuring a sustainable burden of the debt. this announcement makes it clear what the euro area authorities have said since many months, i. e. that a scenario of default and exit from the euro area, which some market participants and observers had toyed with, was simply absurd. the cost of such a doomed scenario, on which not many have really thought thoroughly, is immensely larger than implementing the adjustment that the greek society has to do in any case. this has been recognized not only by the greek government but also by its citizens. if it was so obvious – one might ask – why wasn ’ t the decision by the euro area countries and the greek government taken earlier? it is indeed a good question. the answer has much to do with the political process and the time that it sometimes takes in our democracies to take certain decisions. it took months for the greek government to realise that, in light of the new data on the budget deficit, it had to backtrack from its election promises and reverse its budgetary policy by 180 degrees. it took time for the other euro area governments to realise that a support package was needed to ensure the credibility of the adjustment in the eyes of financial markets. while democracies need time to take decisions, financial markets act quickly, accelerating their position - taking at any sign of indecision by the policy authorities. furthermore, the lehman brothers case shows that democracies are not always able to deliver the most rational and efficient solution. under certain circumstances it is thus rational for markets to bet on the irrationality of the democratic decision - making process. it was irrational to let lehman brothers fail, but it happened. those who bet on that failure earned a substantial amount of money. so why not bet on a possible irrationality of european decision - making? european policy makers may have underestimated the self reinforcing nature of market trends. if a speculative strategy based on a certain hypothesis, such as the default of greece, delivers capital gains over time – as has been the case since the fall of 2009 – it is bound to attract an increasing number of investors