in the past few years : large increases in commodity prices, notably oil prices, and geopolitical tensions ; the pressures of global competition ; uncertainty and the short - term impact of certain reforms to modernise the welfare state and prepare social security systems for population ageing ; and – last, but by no means least – uncertainty about the current and future stance of fiscal policies in many euro area countries. if we can agree on this diagnosis of the reasons for low growth in europe, the elements of a remedy are already emerging. the lisbon agenda – especially after its recent refinement and refocusing, which the ecb strongly supports – addresses many of the structural weaknesses of the euro area economy. it is no coincidence that countries which score highest with regard to the achievement of the lisbon goals are also the ones with the most robust growth performances over recent years. the example of the nordic countries shows how reforms of tax and benefit systems can encourage labour participation ; how investment in education and training and how greater diffusion of advances in information and communication technologies can spur productivity growth ; and how structural reforms in labour and product markets – in a process of schumpeterian “ creative destruction ” – can open up new avenues for growth. robust growth in europe is not a “ mission impossible ”. it can be done. and it can be done without abolishing the basic features of what we call the european social model. can it be done inside monetary union? the single monetary policy, conducted for the euro area as a whole, is playing its part already – notably by providing a low inflation environment with favourable financing conditions. and, of course, the euro has eliminated, once and for all, the intra - euro area exchange rate volatility. the revised fiscal framework of the stability and growth pact – if implemented in a rigorous and responsible fashion – still has the capacity to guide national fiscal policies on a sustainable path, thus bolstering confidence, reducing uncertainty and fostering growth. but clearly, the onus is on national policies, especially structural policies to promote growth, competitiveness and employment. thankfully, things are moving : throughout the euro area, we see governments embarking on structural reforms, some courageously, others somewhat more timidly. some euro area countries – notably germany, but also france, austria, belgium and finland – have made significant progress in improving competitiveness over the past few years. and competitiveness is a key determinant of longterm growth. of course, europe

as a bright affirming flame in the midst of the sea of despair we see around us ”. indian situation let us now focus on the indian situation. at the outset, it must be recognised that increase in food prices in india in recent months has been only a fraction of that observed in many other countries. in particular, the global prices of wheat and rice had almost doubled between january and april 2008, while in india the increase has been far less than one tenth of that. in a sense, this vindicates the long - standing public policy of emphasis on a degree of food security in our country, especially due to the vulnerability of large segments of the population. yet, the prices of food articles spurted in india also in 2006 and 2007. the average annual increase in the wholesale price index ( wpi ) of food articles was around 7. 0 per cent during that period. while increase in the food prices was led by wheat ( 13. 0 per cent ) during 2006, rice ( 6. 0 per cent ) and edible oil ( 13. 1 per cent ) also joined in the price rise in 2007. however, food prices have exhibited some moderation during 2008. the wholesale price index of food articles during 2008 - 09 ( up to may 17, 2008 ) has increased by around 2. 5 per cent as compared with the corresponding period ( 3. 1 per cent ) in the previous year. of greater interest may be the current outlook for individual commodities, which appears positive for wheat, with significant improvement in procurement. in regard to rice production which stagnated since mid - 90s, some turnaround is observed since 2005 - 06. the prices of edible oil increased sharply in 2006 - 07 and spiked during 2007 - 08. however, some moderation has been observed during the current financial year so far. due to stagnant levels of production in pulses the demand - supply gap is met through imports, but domestic prices saw a spurt before seeing a decline during the last one year. prospects for sugar, of which india is amongst the largest producers, appear bright for the current year, since production has risen substantially since 2005 - 06. overall, some abatement of global prices, indication of better domestic supplies and addition to our buffer stocks, along with the series of measures already taken by the government, on the supply side, are expected to yield results in the months to come. over the medium term, however, the national food security mission launched about two years ago