we are considering, demand management policy was quite restrained and, where necessary, restrictive. certainly its guiding principle was keynesian, but it was operated in a very balanced way and was, in any case, subject to an important constraint, which i will come to later. that this was the case should not be a surprise to people who remember the period. for example, the fadden “ horror budget ” of 1951 / 52 and the “ credit squeeze ” of 1961, which nearly cost the menzies government office, have gone into folklore. of course, there were also periods where policy was expansionary, but on average the result was relatively balanced. while growth was high, on average, there was also a business cycle operating during this period, with a couple of reasonably clearly defined recessions and booms. the fact that policy was well balanced can be shown for fiscal policy by a couple of graphs. unfortunately, comparable data do not go back earlier than 1961 / 62, so we will have to lose the 1950s from our comparisons. diagram 1 shows the best general measure of the underlying budget deficit. in the 12 years from 1961 / 62 to 1973 / 74 the budget was, on average, diagram 1 budget balance * per cent of gdp % % 1. 5 1. 5 0. 0 0. 0 - 1. 5 average 1961 / 62 to 1973 / 74 - 1. 5 - 3. 0 - 3. 0 average 1974 / 75 to 1995 / 96 - 4. 5 - 4. 5 - 6. 0 65 / 66 70 / 71 75 / 76 80 / 81 85 / 86 90 / 91 - 6. 0 95 / 96 * general government on an underlying basis. in surplus to the extent of ½ per cent of gdp, and the fluctuations around the average were not very large. in the period since then, the budget has nearly always been in deficit, with an average deficit of nearly 2 per cent of gdp. you can see the three attempts made to bring it back towards surplus - the first one when mr. howard was treasurer, the second one under mr. keating as treasurer, and the third one which is being continued at the moment by mr. costello. in summary, it is the more recent period that could be characterised as activist and expansionary in that there are bigger swings in the budgetary position and, on average, it tends to show a much bigger deficit. diagram 2 general government outlays per cent of gdp % % average 1961 / 62

mario draghi : opening of the cultural days of the european central bank – italy 2011 address by mr mario draghi, governor of the bank of italy and chairman of the financial stability board, at the opening of the cultural days of the european central bank – italy 2011, european central bank, frankfurt am main, 19 october 2011. * * * madam mayor, mr. president, ministers, my esteemed central bank colleagues, ladies and gentlemen, for me it is a privilege and an honour to inaugurate this event, together with lord mayor petra roth and president jean - claude trichet, in the magnificent setting of the alte oper, which traditionally hosts the culmination of the european central bank ’ s cultural days. the cultural days, dedicated this year to italy, are opening just days before the end of my term as governor of the bank of italy and the beginning of my new position at the head of the ecb. this means that i will have the pleasure of being here in frankfurt more often. this year ’ s edition of the cultural days is also distinguished by the fact that it coincides with the 150th anniversary of italian national unity. at home, countless initiatives have retraced and commemorated the events that marked our history as a nation. exalting italy ’ s social and cultural roots is essential, because a country ignorant of its past is a country without a future. i am thoroughly convinced that our common european identity must be founded first of all upon common knowledge of the history and the traditions of the countries that make up the union. the cultural days serve this purpose, stimulating reflections on our shared roots. they offer an opportunity to become familiar with the cultural heritage of the nations of europe, to appreciate their fruitful differences, to comprehend their similarities, to grasp the full sense of our common europe. culture is fundamental to making the european union a living reality. the diverse forms in which it is expressed, crossing borders, create channels for mutual understanding and forge a common feeling of belonging, over and above origin or language. we are now at the ninth edition of the days, and certainly one of the reasons for the growing success of the initiative is the enthusiastic participation of the frankfurt public, the primary audience. let me thank you straight off for your attention to this dialogue. this year, there is perhaps an additional reason to spark the city ’ s interest : frankfurt is the city of goethe, the “ universal ” man of the enlightenment whose italienische