the surge of austerity, condemning europe to slow growth for a long time? a. on the contrary, fiscal soundness is essential for confidence, and confidence is the most important ingredient for sustainable growth. financial soundness and structural reforms are also of essence. but speaking for the past, let me give you two or three figures. in the past 12 years, gdp per capita has grown in europe at the same pace as in the us, around 1 %. in the labour market, despite the years of crisis, the euro area has created around 14 million jobs since the birth of the euro : about 6 million more than in the us. this is again no time for complacency. and nobody can say that we are satisfied when unemployment is still so high. q. is spain the red line in the eu? a. spain in the past has shown a remarkable capacity for innovation, for creativity, growth and job creation. it is a very dynamic country. that makes me optimistic, provided spain continues to implement very actively and convincingly its programme in three areas already mentioned : fiscal soundness, banks ’ reshaping, and structural reforms. q. and the savings banks are the red line in spain? a. in this sense, spain has three main challenges. as regards the savings banks challenge, a lot of hard work has already been done and should continue to be very actively performed. q. especially after the leaks in germany, do you think all the european partners, especially the political leaders, are aware of the danger of the current fiscal situation? a. i appeal to all governments to show a high sense of responsibility, both individually and collectively, and to keep a strong sense of direction. q. at first you didn ’ t seem very happy about the imf involvement in the bailouts. some were even calling for a european monetary fund. why did you change your point of view? a. the worst thing would have been benign neglect by the europeans, which was a big danger at the beginning. having overcome this temptation, the rescue brought together the conditionality and the financial support from the imf and the european partners, which was necessary. q. on the subject of eurobonds, europe has no treasury, unlike the united states. do you think that a step could be taken in that direction? a. at the present stage of european integration, with the current institutional framework, we consider that a major improvement in governance, particularly in fiscal policy,

, roughly in line with developments on the liabilities side. one might try to examine the link between the role of the euro in international financial markets and recent trends in the euro area ’ s balance of payments. of course, there is no one - to - one correspondence between the two concepts. nevertheless, one can observe a correlation, or co - movement, between the international role of the euro in financial markets and the euro area financial account. in particular, the euro area capital outflows in 1999 are consistent with indications that the euro was used more as a financing than as an investment currency. likewise, smaller net capital outflows in the first half of 2000 would also appear consistent with a more balanced use of the euro as a financing and an investment currency. these findings are still preliminary, but they confirm the relevance of developments reflecting the international use of the euro. let me now touch upon some other international private uses of the euro. examples are the role of the euro as a payment currency in the exchange of goods and services, as an invoicing currency in international trade, as a vehicle currency in foreign exchange markets and as a quotation currency in international commodities markets. despite the scarcity of reliable statistical evidence, a few observations can be made. first, the us dollar continues to play a leading role in these areas. second, rapid changes cannot be expected, as these functions of an international currency are driven by scale and network effects and therefore tend to develop only slowly over time. third, the euro has a prominent role in those transactions that directly involve euro area residents. for example, the euro tends to be used for invoicing or payments linked to trade flows to or from the euro area. rounding off this overview of the international use of the euro by the private sector, i should also mention foreign currency cash holdings in a number of central and eastern european countries, in which the deutsche mark takes the lion ’ s share. these cash holdings will be converted into euro as the banknotes and coins are introduced in a year ’ s time. the stability of the euro indeed makes it an attractive medium of exchange and store of value for the general public in countries that have a history of unstable prices. nevertheless, as confidence grows in the domestic monetary policies conducted in these countries, this specific international role of the euro should not develop further. evidence on the international use of the euro by the public sector not only the private sector, but also the public sector may use the euro as an