to aa +. in its comments on this change, s & p stated explicitly that the efsf ’ s rating has a developing outlook, which means that the agency foresees the possibility both of returning the rating to aaa ( if offsetting credit enhancements are adopted ) and of downgrading it further to below aa + ( if key guarantor countries are downgraded ). a lower efsf rating would probably be associated with higher interest costs of refinancing. there might even be a fall in liquidity in the efsf bond market owing to the exit of some institutional investors, who primarily target the aaa segment of issuers. 6. on a more general level, the lack of coordination of resources for supporting european countries is disturbing. it is resulting in fragmentation of resources and a lack of transparency in the setting of parameters such as “ who ”, “ how much ”, “ to whom ” and “ how ”. specifically, the european union, or the euro area, is planning simultaneously to lend to the international monetary fund, to guarantee the efsf and to guarantee the esm, while central banks guarantee the capital of the ecb. if a non - european country wanted to help europe, there is the question of whether it should send the money to the imf or use it to purchase efsf bonds, a senior tranche of the spv, or the peripheral countries ’ debt, i. e. with no intermediation. the many uncertainties associated with the specific operation of the efsf are giving rise to general doubts about the appropriateness of the current approaches to overcoming the ongoing debt crisis in the euro area. i cannot help feeling that many solutions to the problems have been wrongly chosen in part because the main causes of the financial and debt crisis have not been correctly identified. greece gets too much attention from decision - and policy - makers. it represents a mere 1 / 50 of the european economy. i believe that without the political will to provide greece with massive support from european funds to restore its competitiveness – and i see little such will at the moment – its exit from the euro area will be inevitable, since depreciation of the greek currency will become part of the measures to restore competitiveness. the provision of loans to greece has so far primarily bought time. this has enabled wealthier greeks to transfer their savings out of the country. the costs of such action have been a reduction in europe ’ s credibility

financial system is in the end completely incomparable to the pre - world - war - ii system. nowadays, we live in a global world and, although we are more capable of minimising the impact of inflationary disturbances, there are other types of shocks arising. to sum up, the main message we can learn from the history is that price stability as the ultimate goal of monetary policy is not in contradiction with the effort to achieve the financial stability. indeed, on one hand, price stability is a necessary condition to achieve financial stability, as the inflationary disturbances have the potential to cause serious damages to the financial system ; on the other hand, a sound financial system enables the monetary policy to smooth its actions in order to achieve price stability. ladies and gentlemen, thank you for your attention.