possible. this implies less room for halting or suspending procedures and stricter deadlines. behind this we argue in favour of stronger sanctions to encourage compliance. this would require, on the one hand, a wider range of financial and non - financial measures, and on the bis central bankers ’ speeches other hand, less discretion to reduce or suspend them. such a strengthening would improve effectiveness and set the right incentives. at the same time, more ambitious policy requirements would better match the current reality of the euro area. this means having ambitious benchmarks when establishing an excessive deficit and when setting the adjustment path towards a “ safe ” budgetary position. it is very important for macroeconomic surveillance to have a clear focus on the countries with the greatest vulnerabilities. anchoring these new rules at the national level would forcefully anchor them in national legislation. binding commitments by member states to implement strong national budgetary frameworks are key to ensuring national ownership. finally, further improvements in the production of fiscal statistics are in our view warranted. these are all areas in which the ecb is presenting arguments. in the end, these matters are decided by the council and the parliament, and they have therefore the key responsibility in shaping the new framework. ii. the ecb ’ s response to the crisis let me now turn to my final topic – the “ m ” in emu, which is the direct responsibility of the ecb. during the crisis, along with central banks around the world, the ecb has had to operate in uncharted waters. the ecb demonstrated its alertness from the very first day. when the problems in financial markets first became apparent on 9 august 2007, we were the first central bank to respond, acting within hours. while the crisis required fast and unprecedented action we have never lost sight of our primary objective : to maintain price stability over the medium term for the 331 million citizens of the euro area. all – and i emphasise all – our monetary policy decisions during the past twelve and a half years have aimed at delivering on that commitment. as you know, in normal times central banks mainly influence the economy and inflation through the setting of short - term interest rates. in practice, identifying risks to price stability at an early stage is far from trivial. to accomplish this task the ecb relies on a robust monetary policy strategy that draws on several sources of information. economic analysis allows us to synthesise information on short - term inflationary pressures from a multitude of economic indicators

. there is no lack of spending in the countries that are affected most by the low interest rates. i understand the concerns about the low interest rates, but on the other hand, they are what leads to more investment and higher growth. and we need to take into account precisely which interest rate we are talking about. these pension products invest in government bonds with long maturities. many of the reasons why interest rates on government bonds are low have nothing to do with the ecb. they are low because countries such as the netherlands and germany have become safe havens. prior to the crisis, life insurers invested in bonds issued by all countries, both ‘ core ’ countries and ‘ non - core ’ countries. the interest earned on their investment was thus higher because weaker countries had also been included. the crisis created financial fragmentation in that insurers all used government bonds issued by their own countries to fulfil obligations. that caused insurers in the north to be confronted with low yields. returns in the south were particularly good. once there is renewed confidence in the euro area, the northern countries will no longer be the only safe havens. money will then again flow freely and the recovery of confidence will lead to higher yields in the northern countries. besides that, we have to conduct monetary policy for the whole euro area. we cannot consider only one single point of interest. ” do you have any understanding for the fact that people in the north feel that they are having to pay for the mistakes made by the south? “ i am well aware of this conflict. some months ago, i held a lecture on monetary union in the united states. i said then that there were major imbalances between various euro area countries, large debtor and large creditor countries. i said that it was never a goal of monetary union to create permanent creditors and permanent debtors. that would have to change in order to have a balanced union. an american in the audience responded to this by saying ‘ what you are saying does not hold water because here in the united states, the state of oklahoma has always been a debtor, while new york has always been a creditor, and that is no cause for us to worry. so why should you be worried about it? ’ i think that this touches on the heart of the matter. the debts of us citizens are all treated equally, irrespective of where they come from. ” because the united states is a political union. “ indeed