ecb suggest that euro - area gdp will grow by just over 1 % in 2014 and by 1½ % in 2015. and this recovery is not only driven by the “ core euro - area ” countries such as germany. some of the crisis - hit countries have also finally embarked on the path to recovery. and those which have not can at least see the light at the end of the tunnel. it seems that the efforts to implement structural reforms are gradually bearing fruit. competitiveness has improved in most peripheral countries over the past few years. almost everywhere, unit labour costs have fallen substantially. improving competitiveness in turn drives exports higher. all peripheral countries – except cyprus – are projected to see some export growth this year. these achievements are reflected in current accounts increasingly reverting to positive balances. bis central bankers ’ speeches and germany is part of this rebalancing equation. since 2007, germany ’ s current account surplus vis - a - vis the euro area has shrunk continuously from 4½ % of gdp to 2 % of gdp. as business investment in germany is projected to pick up in 2014 and 2015, this rebalancing should continue. the progress that these abstract figures reflect is also visible in more concrete events. for example, ireland and spain have exited their financial support programmes without any friction. and portugal is planning to leave its adjustment programme in the first half of this year. all three countries recently returned to the sovereign bond markets at relatively low yields. it seems that international investors are increasingly acknowledging the countries ’ efforts and achievements. in the case of ireland and portugal, international investors have bought more than 80 % of the newly issued bonds. at the same time, stock markets in these economies have been rising for some time now. these developments underscore the progress that some peripheral euro - area countries have made in adjusting their economies. however, due to different starting points some countries are naturally more advanced in their adjustment process than others. especially in greece further efforts are necessary to manage the turnaround. 3. the role of monetary policy now, what is the role of monetary policy in this process? monetary policy certainly helped to prevent the crisis from escalating. still, there is one thing we should be clear about : monetary policy cannot solve the underlying causes of the crisis. nevertheless, some observers propose an even more expansionary monetary policy. they are worried about the risk of deflation in the euro area. it is certainly true that current inflation rates are rather low

currency. notwithstanding the encouraging developments over the past years, the capacity of the regional bond markets is still limited compared with the huge infrastructure and other financing needs of the region, resulting in heavy reliance on bank financing. much work still needs to be done, including but not limited to expanding the issuer and investor types, gradual liberalisation of barriers to entry of non - resident investors, promoting financial infrastructure linkages, improving corporate disclosure and transparency, more standardisation in legal and governance terms, to name a few. policymakers will have a key role to play in facilitating market developments and removing market impediments in the process. and we hope to see adb, the region ’ s long - standing partner in promoting bond market development, to further its efforts and cooperation with governments in the region on this front. thank you. bis central bankers ’ speeches