, middleincome countries benefited from the introduction of the more favourable houston terms in 1990. when it became clear that even the more concessional debt rescheduling and reduction mechanisms were still not sufficient to attain sustainable external debt levels, particularly in a number of african low - income countries, another key policy initiative was launched in 1996 by the imf and the world bank : the heavily indebted poor countries initiative ( hipc ). under this initiative, the entire international community, including some multilateral institutions, decided to take coordinated action to reduce the debt burdens of eligible countries to sustainable levels. in this context, paris club creditors agreed to increase the reduction in the net present value of eligible debt up to 80 % under the lyon terms and, in 2000, up to 90 % or even more under the cologne terms. the financial implications of these decisions were substantial : around 36 % of the initiative ’ s total cost, amounting to usd 38 billion thus far, has been borne by paris club creditors. finally, the hipc initiative has been supplemented in 2005 by the multilateral debt relief initiative, which allows for 100 % debt relief by multilateral institutions for countries completing the hipc process. this marked a major break with the principle of preferred creditor status of international financial institutions. looking at the most recent past of the paris club, another development worth noting is that the number of countries rescheduling with paris club creditors has been declining significantly. besides the more general macroeconomic developments i recalled at the beginning of this talk, this desirable trend is also due to two more specific developments : first, the more comprehensive debt stock treatment of low income countries ; and second, a graduation from rescheduling of most middle - income countries as a result of the implementation of economic reforms that have increased their access to market financing and thus private creditors. indeed, while official flows to emerging markets were dominant in the 1980s, reaching on average over 60 % of total flows, the 1990s saw a dramatic increase in private flows, which on average accounted for around 85 % in the period from 1990 until 2003. accordingly, the paris club has been paying increasing attention to coordination with private sector creditors. in particular, early discussions can be scheduled when the proportion of private external debt is deemed significant and when comparability of treatment is an issue. also, interaction between paris club creditors and private sector representatives can be initiated if private creditors indicate their willingness to help restore debt sustainability in good faith and if a

benoit cœure : addressing europe's economic and political challenges introductory remarks by mr benoit cœure, member of the executive board of the european central bank, at tum speakers series / hec debats organised by the technical university of munich, munich, 21 november 2016. * * * recent political developments in the united states and the united kingdom have been interpreted as reflecting widespread concerns about globalisation as well as scepticism about international cooperation1. many europeans also regard the responses to cross - border challenges such as economic fragilities, migration and terrorism as unsatisfactory. a broad debate is under way about the european union ’ s raison d ’ etre and its future. this debate resonates particularly strongly as we approach the 60th anniversary of the treaty of rome and the 25th anniversary of the treaty of maastricht. for europe to thrive, europeans, young and old alike, need to be confident that working together is still the best way forward. participation in the european project has rested on three successive promises. for the post - war generation, it was a guarantee of lasting peace and democracy. for europeans who witnessed in their youth the fall of the berlin wall, it held out the promise of freedom of movement and better life chances. for european workers hit by technological change and global competition, it promised economic security and protection. the first two promises have been fulfilled and generated strong support for the european project. but many now consider that the third promise has not been kept. europe has suffered from the worst economic crisis since the 1930s. it partly originated abroad but it was partly also of its own making. next summer it will be ten years since the crisis erupted in europe. many people of your age have felt its effects to a disproportionate degree. with high levels of youth unemployment in several member states2, large numbers of young people feel economically and socially marginalised. 3 for them, the national and european responses have not been sufficient. the emergence of a “ lost generation ” is morally unacceptable – and it would affect europe ’ s prosperity in a persistent way4. in my remarks tonight, i will tell you why i believe that europe ’ s raison d ’ etre remains strong and could be made stronger. as a european central banker, i will focus on the economic dimension. i will only touch on the political dimension insofar as it influences economic outcomes5. the benefits of european integration as president obama said during his