( efsf ) to provide financial assistance to distressed member states. the efsf was replaced by the more powerful european stability mechanism ( esm ) in october 2012. in response to the strong negative feedback loops between banks and sovereigns as well as contagion among national financial markets, european leaders, in 2012, initiated the banking union. its three pillars are : the single supervisory mechanism, the single resolution mechanism and the still - to - be completed common deposit insurance scheme. significant progress has also been made as regards fiscal and economic surveillance. the stability and growth pact ( sgp ) was substantially strengthened by the adoption of the so - called “ six pack ”, and surveillance and coordination were enhanced through the so – called “ two pack ”. the european semester, the macroeconomic imbalance procedure and the country specific recommendations contributed to stronger macroeconomic surveillance. last but not least, the ecb has been addressing the severe and persistent disinflationary forces in the euro area economy with a broad set of non - standard measures. to a great extent, these measures have helped to improve financial conditions and boost the recovery in the euro area. macroprudential policy tools are also now available to secure financial stability. 3. the way forward current forecasts point to gradual recovery in both greece and the euro area. however, the recovery faces several headwinds, relating both to political risks linked to the rise of populism and anti - eu rhetoric, the refugee crisis, brexit and the crisis legacy, namely high unemployment, high public and private debt. in view of these risks and challenges, the way forward should involve structural reforms in order to improve the growth potential and to make greece and the euro area more resilient to future shocks, as well as greater economic policy coordination, convergence and risk - sharing inside the emu. 3. 1 improve the growth outlook and make greece and the euro area more resilient to 2 / 7 bis central bankers'speeches future shocks as noted in the five presidents ’ report, euro area economies should be able to absorb shocks internally. building such a capacity implies removing rigidities in the labour, product and capital markets, so that the relative price adjustment mechanism can work in a flexible and timely manner ( in the absence of exchange rate adjustment ) and for resources to be re - distributed rapidly to their most productive uses. structural reforms in the labour and product markets, as well as improvements in the business environment and the functioning of the

thomas jordan : the euro and swiss monetary policy speech by mr thomas jordan, chairman of the governing board of the swiss national bank, at the europa forum lucerne, lucerne, 2 may 2016. * * * the speaker would like to thank tobias cwik and mathias zurlinden for their valuable support in preparing this speech. he also extends his thanks to petra gerlach and carlos lenz, as well as to communications and language services at the snb. when the euro was created almost two decades ago, there was considerable uncertainty about how the currency would impact switzerland. my predecessors on the governing board of the swiss national bank regularly commented on subsequent euro developments in speeches and frequently voiced their expectations and concerns. things ran fairly smoothly in the first few years ; but the financial and debt crisis rocked the currency union and put the euro under pressure. the snb has responded with a flexible and pragmatic monetary policy. as the difficulties have not yet been overcome, it is too early to draw definite conclusions. one thing is clear, however : getting to grips with the challenges we face has been – and remains – harder than the cartoon character in the picture suggests ( cf. chart 1 ). from the snb ’ s point of view, the experiences of recent years have once again highlighted the importance and value of monetary sovereignty. monetary sovereignty has its price, of course, but it remains true that the interests of our country are best served by retaining this independence. economic importance of the eu, the euro and the ecb ladies and gentlemen, as you all know, the eu is switzerland ’ s most important foreign trade partner. and within the eu, the euro area countries play a particularly important role for us. in 2015, exports to the euro area accounted for around 44 % of total exports ; the share of imports from the euro area was larger still. although the share of exports to the euro area has fallen by around 10 percentage points since 2000 – we are increasingly diversifying our foreign trade towards the emerging markets in particular – overall, the euro area countries remain by far the biggest consumers of swiss products ( cf. chart 2 ). the particular significance of the euro area for swiss foreign trade means that the exchange rate to the euro is an important variable, both for our economy and for the snb ’ s monetary policy. the exchange rate influences the price of foreign goods in switzerland – and thus also inflation, as measured by the national consumer price index ; but it also impacts the price of