is required to restore competitiveness has already been achieved. some of the agreed structural reforms will only make themselves felt in the long term, but others, such as efforts to make the labour market more flexible, can immediately strengthen confidence. the funding of such deficits of fiscally weak euro countries are visible in the huge balances of the target payment system. would the eurosystem have already collapsed without this rescue system, this bailout? i cannot see any bailout there. we have a currency union and a payment system which is organised by the ecb as a single platform. and there are payment flows from one country to another. the fact that these balances arise at all is because of the disturbed conditions in the money market, in which banks distrust each other. rather than lending money to each other, they borrow it from the central bank and deposit it there too. bis central bankers ’ speeches does that not entail enormous risks for central banks, at which target claims are mounting up because of the imbalances? for the bundesbank alone, they amount to almost €500 billion. there are no risks in a cohesive monetary union. there are certainly grounds to monitor the imbalances, because in a currency union with a well - functioning interbank market, the target claims would not become so large in the first place. do you expect the target balances to disappear again one day? yes, of course. we have seen in the past that imbalances recede whenever the situation improves. in december the ecb provided financing of almost €500 billion for the unusually long period of three years. the second operation of this kind, which will be conducted at the end of february, could be of a similar magnitude. can you understand that these large sums make many people feel uneasy, and lead them to wonder if they will one day have to foot the bill? it is important to explain things well. that ’ s why the media are so important. only we are worried too, unfortunately. the net inflow from the first three - year tender, at a good €200 billion, was not that high. there is no sign of inflationary tendencies in the euro area, quite the opposite. and if there should be any sign of future inflation, we have the instruments with which to absorb the liquidity again within a short space of time. but with the longer - term refinancing operations, the ecb also relaxed the collateral framework. we have made

alternative is : we could ignore it and continue to accept bonds as collateral, which we don ’ t intend to do. or you obtain collateral from the other member states. that is the solution it boils down to. via the efsf, additional safeguards to the value of €35 billion are to be provided for a transitional period, so that the eurosystem could then accept greek bonds as collateral, even if they were to be downgraded to “ selective default ”. we are not the imf of europe. our primary task is to ensure price stability in the euro area as a whole, irrespective of what is happening in an individual country such as greece. by removing the greek bonds held by the central banks from the debt restructuring, the ecb has gained a privileged position as creditor. how is that justified? bis central bankers ’ speeches the bonds were bought for monetary policy reasons. there is therefore a public interest. but even more important is the fact that, in the end, it is taxpayers ’ money. it is our duty to protect the taxpayers ’ assets. moreover, we are not there to contribute to government financing by dispensing with claims. but the ecb has always said that the purchases were part of its monetary policy. if it was an independent decision, why shouldn ’ t the central banks bear the losses, which they would take over, without hesitation, if the financing of a bank proved to be unprofitable? what is the difference between losses on government bonds and losses from a bank failure? look at the united states and the united kingdom. in both cases, the central banks have bought up large amounts of securities and the state has secured it with guarantees. but for the markets, this means that the risk for private creditors has become greater. they have to count on the fact that, if the worst comes to the worst, the central bank will be serviced first. how great is the damage for the european government bond market? not very great, because the amount of our bond purchases, compared with the entire market, is small. for that reason, we do not see any effect on risk premia either. moreover, greece is a special and unique case of private sector involvement. the call for greece ’ s creditors to accept a haircut makes it clear that there is no such thing as a risk - free investment any more. is that a problem? that issue was processed by the markets a long time ago.