##terity policy. that ’ s because, all told, the euro - area countries have saved a handsome €1, 000 billion or so in interest, based on the 2007 interest rate level. and yet the large member states of france, italy and spain were precisely the ones which spent every last bit of what they saved in interest payments, instead of using it to pay off their debts. bearing this in mind, it is undoubtedly a welcome sign that the new french president has committed to comply with the fiscal rules and announced his intention to roll out additional economic reforms with a view to boosting french growth. a strong french economy will ultimately be a boon for the euro area as a whole. given the subdued price pressures, it is still appropriate, in principle, for monetary policy to be in accommodative mode. but in light of the ongoing economic recovery and a consensus inflation rate forecast of just under 2 % for 2019, it is certainly legitimate to ask when the ecb governing council should set its sights on normalising monetary policy. equally, there are good grounds to have a diversity of views about the right degree of monetary accommodation – all the more so, given that the highly accommodative monetary policy stance is mainly being achieved through the deployment of non - standard instruments. as you are no doubt aware, i take a critical view of the large - scale purchases of government bonds in particular. in a currency union, purchase operations of that kind blur the especially important boundaries between monetary and fiscal policy. eurosystem central banks have now become the euro - area countries ’ biggest creditors. at the end of the day, this can lead to political pressure being exerted on the eurosystem to maintain the very accommodative monetary policy for longer than appropriate from a price stability standpoint. after all, in the context of asset purchases, changes in monetary policy impact more directly on governments ’ funding costs than 2 / 6 bis central bankers'speeches interest rate moves. and that ’ s naturally also problematical in view of the disciplining effect of the capital markets on government finances. hence my view that government bond purchases are an instrument of last resort - one which should mainly be used to fend off deflation. but i ’ ve said in the past that the fears of deflation are overblown, and since then they have become even less of an issue. what is more, looking at the monetary policy stance, there is no disputing that the

that duties distort the structure of production, thus reducing global trade overall. but a single large country might hope to gain an advantage if the trading partner lowers its export prices and thus ultimately bears the customs duty. it then pays for the trading partner, however, to reduce its losses by raising duties and preventing the shift in trade prices. this means that everyone is worse off in the end. in actual fact, analyses suggest that there are only losers in the trade conﬂict between the united states and china. they indicate that chinese suppliers are not prepared to make major price concessions, which is why us ﬁrms and consumers had to the bear the main burden of the duties. [ 6 ] nor was the reduction in bilateral trade ﬂows offset to a signiﬁcant extent by more trade with other partners. a bundesbank study looked in vain for who had the “ last laugh ” in this conﬂict, for example. [ 7 ] instead, the dispute led worldwide to greater uncertainty, and dampened the propensity to invest and trade. and even leaving aside such uncertainty effects, bundesbank analyses highlight the potential harm : if the duties remain in place, the size of the us and chinese economies would shrink by up to ½ % ; the size of the global economy would shrink by ¼ % overall. https : / / www. bundesbank. de / en / press / speeches / the - potential - long - term - effects - of - the - coronavirus - crisis - on - the - economy - and - on - monetary - policy - 855 … 4 / 14 12 / 21 / 2020 the potential long - term effects of the coronavirus crisis on the economy and on monetary policy | deutsche bundesbank this shows how important it is to keep markets open or make them more open. on the other hand, in globalisation, too, there are not just winners. it is true that, taken as a whole, world trade and the international division of labour boost the prosperity of national economies. but not everyone beneﬁts alike. that is because there is a shift in relative prices and wages, jobs can be lost while new employment opportunities arise elsewhere. it is therefore, for one thing, important to alleviate social hardships with an appropriate transfer system. for another, education is key so that as many people as possible are able to beneﬁt from the opportunities afforded by open markets as well as new technologies. 2