jean monnet, robert schuman, altiero spinelli ). the other would be based on market liberalisation, forming an outer rim of a new european construct, in which britain could obviously play a leading role, if it so wishes. 2 / 5 bis central bankers'speeches for southern european countries of course, the 1 - billion - dollar question is the following : if this dual architecture becomes a reality in the eu ( definitely not likely before the german elections ) will the south of europe be part of a “ new eurozone ” [ a proper fiscal union, with a banking union, a defence and a political union ], or will it be left behind in a secondary, outer circle of countries? this is something i would not like to speculate about here today, and to be frank with you not ever! but it ’ s not a matter of wishful thinking, it ’ s a matter of tough realism. point number 4 : coup d ’ etat in turkey – migrant crisis clearly, brexit is an issue for the whole of europe and southern europe will not be immune to the implications of brexit, for instance because of tourism, external demand, etc. however, coming from one of the countries located on the eu ’ s external border, which has received massive influxes of refugees from war - torn countries such as syria ( we have all seen the pictures of boats washed ashore in lampedusa, gibraltar, or the greek islands of northern aegean ), it would rather be an omission on my behalf not to discuss the more urgent problem for southern european countries right now, which if it escalates further in the next 6 - 12 months may affect the rest of the eu and eventually present an existential threat to the european union itself. migration needs to be recognised as a major policy issue that will play a critical role in shaping the eu ’ s future and it is definitely an issue that should not be underestimated. we have seen last fortnight ’ s election results in berlin and three weeks ago in the german chancellor ’ s own constituency ( mecklenburg - vorpommern ) with the anti - immigration, right - wing ( afd ) party gaining significant ground. it is urgent to tackle the migrant crisis and the linked labour mobility issue. i am particularly worried about recent developments in turkey following the attempted coup and the impact this will have on the migrant crisis, as a major challenge for the eu ’ s future. against the backdrop

in all markets. 6. of course, apart from the structural factors that determine the growth prospects of productivity and of real incomes, the establishment of conditions of price stability in the medium term can also make a crucial contribution. actually, achieving and securing price stability over the medium term is the primary objective of the monetary policy conducted by the ecb, according to its statute. monetary policy in the euro area monetary policy in the euro area will remain fully committed to the mandate, the institutional responsibilities and the primary objective entrusted to the ecb by the 320 million of european citizens. following the recent increase in the ecb interest rates, the rise in medium - term inflation expectations among credit market participants came to a halt. business firms and consumers can be assured that the ecb will not allow secondround inflationary pressures to threaten price stability in the medium term. the ecb does not make a pre - commitment on the future level of its interest rates. it takes into account a comprehensive set of information available at any given time and decides on the basis of its current assessment of prevailing risks to price stability over the medium term. 1. in an economic environment like the present one, the only effective contribution that monetary policy can make to the cause of economic growth is through its firm commitment to the objective of price stability in the medium term. i emphasise the words " in the medium term ", given that monetary policy cannot offset the short - term fluctuations of inflation around its medium - term trend level which are due to exogenous factors such as developments in world prices of oil and other commodities. 2. what monetary policy can and must do is ensure that inflation in the medium term remains consistent with promoting economic growth and job creation. to ensure achievement of this goal, monetary policy must above all ensure that exogenous inflationary pressures do not trigger second - round effects, through firms'price - setting behaviour, wage agreements or other developments that anticipate a rise in inflation over the medium term. such phenomena turn what is a temporary problem into a permanent one, aggravate shortterm rises in inflation and strengthen medium - term inflation dynamics. 3. the governing council of the ecb decided the recent increase in interest rates for a dual purpose : first, to prevent broadly based second - round effects on inflation as those i just described ; and second, to counteract the increasing upside risks to price stability over the medium term, evidenced by the facts summarised below : - between the autumn of