however, these massive economies of scale and scope could also present challenges to maintaining competitive conditions. as firms gain market power, their capacity to exert political pressure to protect and increase their market power also rises. 7 what started out as good market power could quickly become the bad market power creating dynamic inefficiencies. this could limit the productivity benefits from new technologies by creating obstacles to the entry and innovation of new players, as well as slowing down the diffusion of innovations to potential competitors. conclusion firm - level data are essential to improve our understanding of macroeconomic trends that result from the behaviour of heterogeneous firms. for the euro area, this often involves comparing cross - country trends. such analysis tends, however, to be hindered by two basic data constraints. first, existing indicators based on firm - level data are often not comparable across countries and, therefore, analysis based on micro data often remains confined to the national level. second, firm - level data are usually confidential. compnet plays a pivotal role in tackling these two problems. compnet ’ s dataset indeed relies on a research and statistical infrastructure based on collaboration among country teams, which allows for cross - country comparability. the confidentiality constraint is addressed through the “ distributed micro data approach ”, which allows the different moments of the distribution of several indicators to be calculated. 1 i thank isabel vansteenkiste for her support in preparing this speech. 2 for the united states, a number of studies have documented a rise in markups using a variety of methodologies and approaches. see, for instance : de loecker, j. and j. eeckhout ( 2017 ), “ the rise of market power and the macroeconomic implications ”, nber working paper 23687, nekarda, c. and v. ramey ( 2013 ), “ the cyclical behavior of the price - cost markup ”, nber working paper 19099 and hall, r. ( 2018 ), “ new evidence on the markup of prices over marginal costs and the role of mega - firms in the us economy ”, nber working paper 24574. other authors have noted a rise in concentration rates, for example : peltzman, s. ( 2014 ), “ industrial concentration under the rule of reason ”, journal of law and economics 57 ( 4 ), autor, d., d. dorn, l. katz, c. patterson and j

was increasingly stepped up in the final months of 1998 between those countries participating in stage three of monetary union. the coordinated reduction of central bank rates in december 1998 to 3 % made it perfectly clear that, de facto, monetary union had already begun before the start of stage three. looking at economic developments, in the first few months of this year there have been an increasing number of indications that the negative effects of the crises in asia and russia on growth and employment in the euro area could be more serious than was first expected. with the apparent slowdown in economic growth in the euro area, the risks that the 2 % threshold for the tolerable rate of inflation would be exceeded in the foreseeable future evaporated. this forecast was also reflected in the revisions to the inflation forecasts of international organisations. at the beginning of april 1999, the governing council of the ecb therefore decided to reduce the interest rates on the main refinancing operations by 50 basis points to 2. 5 %, as well as the rates on the standing facilities to 1. 5 % and 3. 5 % respectively. the m3 monetary aggregate did expand such that it was slightly above the reference value at the beginning of 1999. however, it was not clear, at that point in time, whether this sharp increase at the beginning of the year was a one - off effect in connection with the launch of the single currency and thus quickly fall again. in view of these uncertainties, the governing council of the ecb saw nothing in the development of m3 in the spring of this year to prevent it from reducing the interest rates. current assessment of the monetary, financial and economic situation please allow me to explain briefly how the governing council of the ecb currently views the monetary, financial and economic situation in the euro area. since the beginning of the year, the annual inflation rate for the harmonised index of consumer prices has stood at around 1 % in the euro area as a whole, i. e. within our definition of price stability. whilst the rate of price increases in food products has been falling since the beginning of the year, energy prices have increased strongly as result of the sharp increase in oil prices over the last few months. overall the upward pressure turned out to be moderate, and perhaps more moderate than expected, which is a reflection of the increased competition in the service sector and the success of deregulation in some markets. however, since production costs could also increase in time as a result of the increase