economic activity. the european commission has invited those countries that have fiscal space, such as germany, to use it in the way they consider most appropriate for their economies. those who don ’ t have any fiscal space shouldn ’ t use it or pretend to have it. this applies not just to italy, but also to france. both countries still have some way to go to rebuild their fiscal buffers. many market participants believe that italy could be a source of crisis in europe … it ’ s not for me to talk about politics. but it ’ s true that, economically speaking, italy is a in a difficult juncture. it is the only euro area country that is experiencing a technical recession. and it has not seen an improvement in the labour market, which is another thing that sets it apart from other euro area economies. in the longer term, italy ’ s problem is well known : it is productivity growth. i don ’ t believe that any of this has to do with the euro, otherwise it would be a general problem across the euro area. the response is to focus on the country ’ s strengths, such as its small and medium - sized enterprises. and to use the single market to leverage their strength and help them export to global markets. isolation and protectionism don ’ t work. europe is an asset for our economies. 1 / 2 bis central bankers'speeches it seems to be difficult at the moment to undertake the much discussed reforms to complete the banking union and the capital markets union. do you share this impression? yes, i do, and it ’ s a concern for the ecb. we firmly believe that europe is part of the solution in dealing with the problems faced by european citizens. many citizens in many countries are angry because economic results are not what they should be, because it has taken too long to recover from the financial crisis, because unemployment especially among the youth – is still high and because globalisation has not lived up to its promises, instead increasing inequality and marginalising parts of society. the measures needed to respond to these issues can only be effective at the european level. not everything is working well in europe and it begs a discussion. italy, as a founding member of the eu and as the third economy of the euro area, needs to be part of it. what do you think of the proposals for reform made by macron? i don ’ t want to comment on what the french president says. he has sparked a debate on the future of europe,

to the banks well above the usual levels and under more flexible conditions than usual. executive branches have decided exceptional measures to support financial institutions and help stabilising the financial markets. you may now ask : does it make sense in current times to focus on the integration of payment markets and infrastructures? does it make sense to invest in the integration and modernisation of retail payments business? our answer is : yes, it does. let me first briefly discuss how integrated payment instruments, systems and infrastructures have strengthened the backbone of modern economies. second, i will explore how benefits by integration and innovation are to be realised in retail payments business. quite fundamentally, the availability of reliable and safe payment means for the transfer and settlement of funds is a conditio sine qua non for economic interaction. due to the very rapid growth in the volume and the value of payment transactions stemming from the money, foreign exchange and securities markets, the importance of payment clearing and settlement infrastructures has grown considerably over the last two decades. the integration of these markets is closely correlated with the degree of integration of the underlying payment infrastructure. thus, the effective transmission of the single monetary policy throughout the euro area, the depth and liquidity of financial markets, and the resilience of the european financial system as a whole depend to a considerable extent on the integration of the payment infrastructure. the ecb report on financial integration of april 2009 has assessed the state of the european financial integration process. the segment closest to the single monetary policy, the euro area money market, continued to be highly integrated until autumn 2008, when the financial crisis intensified. this integration has been supported by the high degree of integration of the underlying large - value payment system. the second generation of target, target2, has not only established an even more uniform wholesale payment service in the euro area, it has also introduced innovative functionalities. in fact, target2 is the first market infrastructure to be completely integrated and harmonised at the european level. in the same way that target2 backed the integration of the uncollateralized money market, the introduction of target2 - securities ( t2s ) will further foster the integration process by supporting the collateralised money market. the retail banking segment in europe, by contrast, remains rather fragmented, as does the underlying market infrastructure. despite the introduction of the euro, payment habits still vary widely across the euro area. in some countries, cash is making up more than 90 % of retail payment transactions by households