over the past decade, at about 1 % per year in terms of gdp per capita growth. the euro is now well established as a credible currency, of which citizens can be proud. this is important for all the member states of our union, both individually and collectively, as we together face the challenges of the global economy. responding to the crisis : bold actions in line with steadfast policy orientation none of these achievements happened by accident. they were only possible because our actions were enshrined in our medium - term oriented monetary policy strategy. the financial crisis has changed neither our strategy, nor our objective. the ecb ’ s response to the crisis has always been in line with both our strategy and our medium - term objective of price stability. but we did broaden the range of our tools to adapt monetary policy to the challenges of the crisis. what we did was to insure euro area banks against present and future liquidity shortfalls. banks are the backbone of our financial system. 70 % of firms ’ external financing comes from banks. they finance a very large share of the investments made in europe. jeopardising banks ’ ability to lend to companies would have meant jeopardising the jobs of millions of europeans. because of the crucial role of banks in the real economy, we decided to provide liquidity in unlimited volumes and with longer maturities to banks. in parallel, we reduced the interest rate at which they can borrow to a historical low of 1 %. and we launched a programme to purchase euro - denominated covered bonds, i. e. pfandbriefe, issued in the euro area. the aim was to jump - start this market, which had suffered considerably in the crisis and which is so important for europe. overall, the eurosystem – the ecb and the national central banks – purchased eur 60 billion of pfandbriefe across the euro area. this has provided an important contribution to revitalising this market after the crisis. we will hold the bonds to maturity and the profits will be distributed to our shareholders. because of these and a number of other important steps, fears of a “ kreditklemme ” have not materialised. our bank lending surveys show that lending in the euro area – even in the middle of the crisis – was not significantly constrained by supply - side factors. that being said, monetary policy responsibility can not substitute for government irresponsibility. excessive government borrowing by some member states

led to a seizing - up of the market for government paper. this market plays a central role in our financial system and constitutes a crucial element in the transmission of monetary policy to the real economy. fire sales of government bonds imply a sharp deterioration in banks ’ funding conditions. confronted with a serious dysfunction in important segments of financial markets, the governing council of the ecb decided to intervene. the reason for the decision was certainly not to finance debt - laden member states, but to address some severe malfunctioning of markets, so as to help ensure a better functioning of the transmission of bis central bankers ’ speeches monetary policy to all euro area economies. let me stress solemnly that our monetary policy stance is itself designed to deliver price stability over the medium term. in any case, we told all governments that they had to correct drastically their fiscal policies. this was not new. it has been our constant message to executive branches : governments must restore fiscal sustainability without delay. this brings me to the second part of my remarks. sound fiscal policies : a pre - condition for monetary union after one of the most difficult years for our still young common currency, it is time to turn the page. it is time for each and every member state to live up to its responsibilities. and it is time to strengthen the code of conduct for national governments, notably the stability and growth pact, of which i will not hesitate to say that theo waigel is the founding father. we know that for several years fiscal policies in some countries have breached both the letter and the spirit of the pact. the problems that hit some european bond markets last year were a visible and tangible testimony of fiscal misconduct. the watering - down of the pact in 2004 and 2005 by europe ’ s largest economies was a quieter event, but it was no less grave. in that period, member states chose to change the rules rather than their policies. the ecb voiced its “ grave concerns ” at the time. today, governments have no choice but to change their policies. and they must substantially reinforce the stability and growth pact. and it is not only fiscal policies that need to be brought back onto the path of virtue. in several countries, macroeconomic policies more generally need to be aligned with best practice. germany went through some painful years of macroeconomic adjustment. not so long ago it was called the sick man of europe. since then, relative unit labour costs have been improved, labour market barriers have been lowered and employment has risen. today, the german