benoit cœure : interview in le monde interview with mr benoit cœure, member of the executive board of the european central bank, in le monde, conducted by ms marie charrel, and published on 27 july 2015. * * * can the threat of grexit be ruled out? i hope so. this was the first time that the question of keeping a country in the euro area had clearly been asked. this question was not put to the ecb, however, but to the government leaders, in a highly political manner. they answered it with the agreement of 13 july. the message is clear : everyone wants greece to remain a member of the monetary union. they are prepared to continue to show unprecedented financial solidarity towards athens, but not at any price. greece must implement reforms that will ensure economic growth and stability. must there be debt relief for greek public debt? that is no longer a matter of debate. moreover, the european leaders have shown willingness to discuss this topic. in truth, the question is not whether greek debt should be restructured, but how to do it so it really benefits the country ’ s economy. hence the importance of making this restructuring, whatever form it may take, conditional on the implementation of measures that will contribute to strengthening the economy and ensuring the sustainability of the greek public finances. will the third rescue package succeed where the first two failed? one of the keys to success lies in the capacity of the greek government to make its citizens understand that the measures requested are not a form of punishment. these measures are crucial to both the development of the economy and the good functioning of the administration. the programme ’ s reforms do not aim to impose unbridled neo - liberalism on athens. on the contrary, they aim to create a modern and fairer fiscal, social and legal framework, and to build an efficient state that is able to intervene in the economy for the common good, something that the greek state has often failed to do in the past. the role of the ecb in the greek crisis has been heavily criticised. some accuse it of having suffocated the country ’ s banks, others of having helped them too much. who is right? we are the central bank for the 19 countries of the euro area, including greece. that is our mandate and we have never strayed from it. since the end of 2014, the amount of liquidity injected into the greek economy by the eurosystem has increased from €40 billion to €

guide for monetary policy makers. fortunately, the ecb ’ s monetary policy strategy is well - suited to guide monetary policy in the current situation. at a time when academics are reconsidering the mandates and strategies of central banks, it is important to stress that our strategy is comprehensive and robust. all of you are aware of the main elements of our strategy : • the quantitative definition of price stability • the medium - term orientation • the two pillar - based assessment of risks to price stability i would in particular like to highlight that the high priority we attach to the monetary analysis offsets any over - dependence on single, potentially flawed indicators and concepts, such as the output gap. to illustrate this, let me go back to 2005. in that year, the signals from the economic analysis remained rather mixed and our monetary analysis was indicating upward risks to price stability. this led us to increase interest rates in december 2005 – a move widely criticised, also by a number of ecb watchers. in retrospect, however, the strength of the economic recovery from 2006 and onwards showed that our decision was well - timed. moreover, tightening monetary policy at an early stage may have been one important reason why financial imbalances in the euro area could be kept relatively contained, compared with those in some other regions. there are few historical precedents for steering monetary policy back to a “ normal ” path after a prolonged period of a very accommodative policy. but one unambiguous lesson from the past is that an over - reliance on real - time assessments of the state of the economy and a neglect or even misinterpretation of monetary developments can contribute significantly to policy mistakes. the textbook example of a premature tightening is the increase in reserve requirements in the us after the great depression. to counter the potential inflationary consequences of excess reserves in the banking sector, central bank reserve requirements were increased in 1936. in 1937 / 38, the us economy entered a new recession, which was partly blamed on the monetary tightening brought about by the higher reserve requirements. fiscal policy was also tightened. with hindsight, one can say that it was a failure to appreciate the fragility of the recovery and a misinterpretation of the inflationary consequences of the monetary developments that led to a too early exit. in addition, the statistical base on which monetary authorities had to base their assessment of the state of the economy at that time was thin. examples of tardy exits from monetary accommodation