to review how the expertise of the paris financial marketplace can be used and leveraged. let me highlight the following questions : - why has the european financial market become a major pillar of international finance? - and what are the key advantages offered by the paris financial market place? 1. first, why has the european financial market become a major pillar of international finance to compare favourably with the other large markets of the world? today, europe consists of 27 countries representing a market of around 500 million consumers : the largest domestic market in the world in terms of purchasing power. the acceleration of the integration of european financial markets has radically transformed the international financial environment. all activities are concerned. regarding bond markets, european debt instruments issued in euro on international markets are now quite comparable to those denominated in dollars. if we take into consideration bonds issued on external markets by “ non euro area resident ” companies, foreign governments and multilateral institutions, we can observe that in 2006, total issues of international bonds and notes in euro represented an outstanding of an equivalent of 1, 200 billion ( usd ) against 1, 000 billion ( usd ) in dollars. this fact shows that the euro market has grown considerably since the beginning of the 2000s and today constitutes for corporates and governments a vast, safe and liquid source of funds, wider than that of the us dollar. while the us dollar remains dominant as an international reserve currency ( 65 % of international official reserves against 24 % for the euro ), bond markets have become bipolar with the euro playing a leading role. european equity markets have constantly developed since the 80s although they remain smaller than those of the united states. in terms of ratios of market capitalisation to the gdp of the countries, euro area equity markets represented 55 % in 2005, while those of the united states amounted to 105 % and japan to 85 %. however, the euro area equity market has been growing progressively at an average rate of 10 % per year, since 1999. the share of equities in european investment funds has increased by 3 points since 2002 and amounted to 27 % in 2006, while the proportion remained stable in the united states at 45 %. as regards asset management, we observe that since the launch of the euro in 1999, europe has caught up the united states in terms of the world - wide distribution of investment fund assets. the united states and europe hold the largest market shares in the world, at 50 % and 33 % respectively. 2. in this context, what are the key

up the discussion with the private sector. the basel committee is gathering all the responses from the industry that were due by the end of april. we will work intensively, at the level of the international community, on the appropriate calibration of the new basel rules. you think that the exit strategies of the fiscal policy, namely in some countries higher deficits like ireland, portugal or greece, are in themselves threats to the economic recovery? we in the ecb governing council have always defended fiercely the stability and growth pact ( sgp ). we have always drawn the attention of the governments to the fact that the sgp was essential and crucial for the economic and monetary union ( emu ). for all governments, the sound management of fiscal policies is essential, not only because they are part of the emu, not only because it is both moral and common sense behaviour to protect the children and the grandchildren and not to impose on them an abnormal burden, but also because it is a crucial element in of the confidence of the households, entrepreneurs and market participants. that is the reason why we see no contradiction between the objective to permit the economic recovery to expand and be active as possible, and the sound management of fiscal policies. but governments should be careful on the pace of fiscal tightening to avoid risks? governments should be aware of the fact that if they do not do what is necessary to be credible in having a sustainable fiscal position in the medium term, they will not create confidence. if they do not create confidence in their capacity to run sustainable fiscal policies they will not help the recovery today. because the recovery today depends crucially on the confidence of households, of fellow citizens and of enterprises. do you think portugal could experience in the future a situation similar to greece if the government fails to accomplish stability and growth program and bring the deficit to a level below 3 % of gdp? the countries are all in very different situations. that being said all governments of the euro area, without exception, have the task to be credible in the sustainability of their fiscal policies. it is our permanent message. you know for some time our finance minister, teixeira dos santos. he was able to cut fiscal deficit between 2005 and 2008. is he the right person to do it again right now? it is not the responsibility of the ecb to give good marks and bad marks to finance ministers! all what goes resolutely and courageously in the direction of sound fiscal policies and improvements in the cost competitive