monetary policy, financial stability measures and fiscal policy must be compatible with the special conditions of monetary union. this coherence is currently not given. however, i do not see the deficits so much in the area of monetary policy. its commitment to the primary objective of price stability has proven its worth and must therefore be upheld, especially in view of the increasing efforts for the mandate to be expanded. nevertheless, a deep rift has developed in the fiscal and economic policy foundation of monetary union. this foundation emphasises member states ’ individual national responsibility and sovereignty, which is, however, being increasingly undermined as a result of the progressive communitisation of risks. it is here that i see a need for adjustment and the need for europe to make a pivotal decision, which can no longer be delayed. it is for this reason that the topics of fiscal union, deeper integration and political union are currently on everyone ’ s lips. in the following, i will therefore be focusing on the fiscal and economic policy foundation of the euro area in particular. but first, i would like to begin by taking a short look at monetary policy and financial stability policy. 2. core function of monetary policy in relation to financial stability there is currently no lack of suggestions with regard to adjusting the pre - crisis monetary policy consensus to the supposedly new circumstances. the bottom line of much of the advice directed at central banks is that they should raise their inflation target. although the benefit of low inflation rates is not being questioned as such, it is suggested that, given that other policy areas have been pushed to their limit, monetary policy, too, ought to contribute to reducing debt and the imbalances in the crisis countries by means of higher inflation rates. to cut a long story short : such an approach is completely unsuitable as a solution of these problems. besides, the price to pay would be far too high, namely the loss of credibility of monetary policy as the precondition for price stability. placing confidence in central banks is the solution to the time inconsistency problem of monetary policy, and this confidence is like confidence in general : it takes a great deal of time and effort to build up and from a certain point can be easily squandered. however, it is this confidence that forms the basis for public acceptance of monetary union. discussions on the benefit of higher inflation targets or expanding the monetary policy mandate – as fruitless as they may be – put this confidence at grave risk. bis central bankers ’ speeches

comes with hardly any unwanted implications. rather, it is easy to implement, because there would be no need to upgrade the existing and established t2 system. that is the good news from the wholesale side. now i would like to focus on the retail project. 2 why we need a digital euro the digital euro is currently in the " preparation phase ", as it is called. in this phase, which is scheduled to run until october 2025, our experts are preparing for the possible implementation of a retail digital euro in the euro area. the ecb's governing council will take a decision after this phase and following adoption of the necessary legislation. i am aware that some people have their reservations about the digital euro project. we need to take these reservations seriously and counter people's concerns with compelling arguments. one of the main arguments against a digital euro is that we do not need it at all. in my view, that argument is flawed. our lives are turning increasingly digital. in shops, more and more people prefer to pay with cashless means of payment. and when it comes to online shopping, which is becoming ever more important, we as customers have no choice but to pay electronically. both of these factors mean that cash use is lower than it once was. however, the electronic payment options currently available to euro area households have their deficiencies. some payment cards work only in specific countries. and all the cross - border payment options are currently non - european, which limits our strategic autonomy in a critical infrastructure. that's why, as a service provider to society, we are thinking about offering a digital form of central bank money for the general public. 3 results from a public survey on the digital euro if i could see you now, i would see a group of experts who know exactly what makes cbdc special. and what sets it apart from other digital assets. however, if we look at the digital euro's main target group, the general public, we see significant gaps in their knowledge and understanding. 2 / 4 bis - central bankers'speeches a recent representative survey for the bundesbank showed that this is the case for the german population. 1 only 41 percent of respondents said they had already heard, read or seen anything about the digital euro. by contrast, 59 percent said they knew nothing about it yet. that doesn't come as much of a surprise, though. as long as the final decision on the digital euro has not been taken, it makes little