vitor constancio : effectiveness of monetary union and the capital markets union speech by mr vitor constancio, vice - president of the european central bank, at the eurofi conference, malta, 6 april 2017. * * * introduction in my remarks today i will link the role of monetary policy with the project of the capital markets union ( cmu ). monetary policy has played a vital role in bolstering euro area resilience to the large shocks that have occurred over the past decade. indeed, it is the only expansionary macroeconomic policy in support of the resilient recovery now underway in the euro area. nevertheless, we have not yet completed the task of attaining our goal of a sustained path of inflation close to but below 2 %. but while monetary policy has been successful at sustaining the area - wide recovery, it is unable to significantly counteract the effects on individual countries from asymmetric shocks, which have been substantial in recent years. there is an important role here for capital markets. by permitting households and businesses to draw on cross - border income streams and lending, deeper financial integration reduces the impact of asymmetric shocks. the degree of financial integration in the euro area is currently insufficient. indeed, in the recent crisis, the degree of financial integration fell, as interbank markets fragmented along national lines. this fragmentation exacerbated the overall impact of the shocks on the euro area, deepening the recession, lengthening the recovery and increasing the need for unconventional monetary policy measures. the single currency area provides fertile conditions for deeper financial integration and that deeper integration in turn helps build resilience to shocks and strengthens the effectiveness of monetary policy by means of a more homogenous transmission. monetary policy and cmu are thus linked. let me start by discussing the current situation and the contribution of monetary policy in sustaining the current recovery before returning to discussing how cmu can help generate greater resilience to future shocks. the current economic conjuncture the euro area recovery is gaining momentum, broadening across sectors and countries. this is evidenced by 15 consecutive quarters of positive real gdp growth, unemployment at its lowest level since 2009 and over four and a half million more people employed now than was the case three years ago. growth in manufacturing also reached its highest rate since 2011. moreover, the current recovery has shown considerable resilience amid an environment of uncertainty. typically, euro area activity closely co - moves with world trade, so if the latter slows

yves mersch : interview in borsen - zeitung interview with mr yves mersch, member of the executive board of the european central bank, in borsen - zeitung, conducted by mr mark schrors und mr detlef fechtner on 18 december and published on 29 december 2017. * * * mr mersch, the euro area economy is booming and inflation is picking up. will 2018 be the year of monetary policy change for the ecb, with a shift away from the ultra - loose monetary policy of the crisis years? the change actually already got under way a year ago. we first reduced our monthly asset purchases from €80 billion to €60 billion, and as of january we will in fact be down to €30 billion. we are also letting our targeted longer - term refinancing operations expire. so it really cannot be said that we have not taken the improved data into account. our monetary policy is datadependent, and we always react to the latest developments. this will also be the case in 2018. but the ecb has always downplayed the significance of all these decisions. do you think that market participants have understood that the change is already under way, as you say it is? sometimes markets react more quickly than expected and sometimes they take a bit longer. and sometimes they overreact, so we have to be very careful. we don ’ t want to cause any upset. but it is indeed surprising that long - term interest rates are now lower than they were in the summer, although growth has surprised very positively and growth and inflation forecasts have been adjusted upwards. it doesn ’ t really follow. the main thing for 2018 will be a decision on quantitative easing ( qe ), i. e. the large - scale purchase of assets, which is currently locked in until 2018. if growth and inflation develop as currently expected, will that be the end of qe? we will make that decision when the time comes. keeping the end - date open now was the right thing for the governing council to do. the first step is to implement the decision to halve our purchases to €30 billion. but as ecb president mario draghi recently said, we are now more confident that inflation is on a sustainable path towards our medium - term objective of below, but close to, 2 %. but the more confident we are of meeting our objective, the more the likelihood of a further increase in our purchase