among some european politicians, to develop certain critical technologies on european soil. tremendous effort has been put into developing european regulations to manage these and other digitalisation - related risks. so that european citizens and businesses can take full advantage of new technologies, safe in the knowledge that the risks are well managed. 1 / 2 bis - central bankers'speeches large digital service providers, such as cloud providers, are set to become subject to european oversight, for example. and supervision of crypto service providers is being expanded. however, developments are happening rapidly, and the challenge is to be able to reap the benefits of innovation while keeping out the bad stuff. of all innovations, generative artificial intelligence is undoubtedly the most exciting : with the emergence of incredibly capable generative models and dramatic advances in computing power, we might very well be on the verge of a new technological revolution. who knows soon we can all paint like rembrandt. also here, we must make sure to maintain a healthy balance between harnessing the benefits of innovation while mitigating the risks. when it comes to innovation, some regions, like the us, have traditionally focused more on the opportunities side, with a regulatory environment that's conducive to business innovation. we europeans tend to focus on the risks and call for regulation. but falling behind in adopting new innovations is a significant risk too. so i would call for a balanced approach, and warn against constraining ai - driven innovation too much but that doesn't relieve us of the obligation to monitor the risks that come with it. many of the potential risks of ai may seem new, but if you look beneath the surface, they are strikingly similar to traditional financial risks. risks that we are familiar with. we already have frameworks to assess concentration risk, third party dependence and interconnectedness. this is good news. of course, it's not a simple copy - paste exercise. we may see new forms of interconnectedness in the financial system. for example, autonomous trading agents may interact to create new dynamics in financial markets. and technology that can be used to paint like rembrandt also offers possibilities for creative fraud, from phishing to identity theft. so the nature of the risks may not be different, but the crooks are getting better. that means we are entering a new phase of the never - ending race between risk and risk management. but we are entering this race from a relatively good starting point. ai is not

end of my speech. for the future, i am optimistic. we have passed the turning point in the cycle. for this year, i expect growth to be 0. 7 %, rising further to 2 % in 2005. an important driving force is the global recovery, which will stimulate our exports, even though we have to regain competitiveness. nevertheless, the strength and sustainability of this recovery will to a large extent depend on the persistence and speed at which the reforms that have already been set in motion are pushed through. in particular, next to the substantial budgetary consolidation efforts, the continuation of wage moderation to foster price competitiveness is essential. the tripartite agreement that was reached last autumn to freeze nominal wage rises in the next two years is a positive development in this respect, as it clearly shows that the importance of wage moderation is now in the minds of both employers and employees. turning to the economy of the eurozone, it is clear that the slowdown has been less steep but more prolonged than in the us. in the us, economic growth deteriorated with 3. 5 percentage points from 2000 to a virtual standstill in 2001, after which it quickly regained speed with a growth rate of 2. 5 % in 2002. in the eurozone, the slowdown was much more gradual, with a fall in economic growth of 3 percentage points over a period of three years, from 2000 to 2003. this pattern of the slowdown - a gradual deceleration of growth, rather than a sharp fall in output - may have meant that the immediate pressure on corporations to adjust their balance sheets and labour force was less intense, delaying the adjustment process. high debt levels in comparison with those in earlier cycles may also have contributed to this relatively prolonged downturn. nevertheless, for this year, the economy of the eurozone is expected to grow with 1. 6 % and with 2. 4 % in 2005. like in the netherlands, this turnaround has been mainly driven by rebounding exports due to the recovery of global trade. in addition to the strengthening of external demand, domestic expenditures in the eurozone will take their part in the recovery. with respect to household spending, both short - term and long - term interest rates are at historical lows, which have eased debt servicing costs of households. of course, the fact that interest rates are so low, also raises the risk of renewed increases in the future, with possible adverse effects on households ’ debt profile. furthermore, although the appreciation