regarded as characterising the new economy is typically seen as the result of an underlying economic process which may take some time to bear fruit and therefore may clearly precede the emergence of the symptoms of the new economy in macroeconomic data. increased investment in computers, software, peripheral equipment, network infrastructure and other information and communication technologies are generally regarded as the most salient driving force behind what has been perceived as a new pattern of growth. second, the new economy is seen as being closely associated with the processes of deregulation, particularly in labour markets and network industries such as telecommunications, and globalisation, particularly in financial markets. other accompanying conditions, such as increased competition and flexibility in domestic goods and factor markets, as well as a stable macroeconomic environment, are also indispensable components of the same picture, if not equally powerful determinants of the phenomenon. they allow the full potential of technological innovation to be exploited and ensure that a faster pace of economic expansion and employment can be achieved on a more sustained basis and without destabilising inflationary pressures. the ecb cannot, however, " create " a new economy through its monetary policy. the new economy depends mainly on technological progress and the liberalisation of markets. however, the ecb can provide a positive contribution to growth and employment prospects by safeguarding price stability. maintaining price stability is the ecb's primary objective. unfortunately, this is sometimes forgotten. in the long run, pursuing this objective will help the economy to enhance its growth potential. in this context, the governing council of the ecb, at its meeting last thursday, confirmed the " wait and see " position with regard to the monetary policy stance. in an environment of increased uncertainty about the global economy and its impact on the euro area, the governing council is carefully assessing whether and to what extent upward risks to price stability will continue to decline. as far as the first pillar of our monetary policy strategy is concerned, the decrease of money growth indicates that upward risks to price stability have receded. as for the second pillar, domestic upward price pressures may decrease as a result of somewhat lower than expected gdp growth in the euro area. however, due to the risk of secound - round effects from past oil price increases, wage developments will be monitored carefully, as these might result in upward price pressures. in the financial sphere, the advances in information and telecommunication technologies have started to have their effects. this was perhaps even more visible than in the non - financial

number of countries have implemented reforms in recent years which have helped to reduce unemployment – most visibly spain and portugal, but also italy. 2 these reforms also seem to have made unemployment more responsive to growth. 3 structural policies are a main factor explaining these positive developments. but of course supportive financial and macroeconomic policies have been vital, too. new research also finds that labour market reforms in the euro area reduce the dispersion of unemployment and gdp across member countries following a common shock, making the 1 / 5 bis central bankers'speeches single monetary policy more effective for everyone. 4 but it is clear that, to get the best results, there has to be some broad coordination among countries. labour market reforms can emphasise more wage adjustment or more employment adjustment, and countries will only converge in their response to shocks if they have a broadly similar mix. 5 this underscores why the european semester process is crucial – not only for encouraging structural reforms, but also for ensuring some degree of beneficial consistency between them. lessons on the composition of reforms and their interaction with macro policies still, even if some countries have had positive experiences with reforms during the crisis, we know that for others it has been more difficult. this brings me to my second theme about the design and implementation of reforms. there are three key areas where lessons can be drawn : the packaging of reforms, their scope and the macro - policy mix that accompanies them. first, the packaging of reforms is crucial for reducing their short - term adjustment costs. unlike what happened in the years even before the crisis, labour market reforms must be preceded – or least accompanied by – product market reforms, otherwise wage adjustments will not be fully passed on to prices. instead, profit mark - ups will rise and the purchasing power of households will fall, thereby worsening the economic conditions of consumers and aggravating any recession. 6 during the crisis, because of powerful vested interests, labour market reforms were not accompanied by product market reforms in some countries, and so wages fell and prices did not adjust in tandem. the key question is then : how do we make sure that product market reforms do indeed take place? while there are no easy answers, imf research suggests a central part of the answer may be carefully designed fiscal incentives to soften the blow for those affected. in the past, germany, ireland and the uk have all successfully used such incentives to bring about these reforms. 7 the second area where we have learned lessons from the crisis is the scope of