jean - claude trichet : how to increase the competitiveness of the european economy speech by mr jean - claude trichet, president of the european central bank, at the panel discussion, karlspreis europa forum, aachen, 30 april 2008. * * * ladies and gentlemen, i would first like to thank the organisers for inviting me to speak here today and share my views on how to increase the competitiveness of the european economy. competitiveness in a broader sense can be understood as the ability of economies to thrive in an increasingly integrated international economy and to embark on a sustained path of high output growth that enhances people ’ s wealth. competitiveness is therefore related to macroeconomic stability and the ability to maintain the real value of people ’ s assets, as well as to structural factors that contribute to the long - term growth potential. 1 the introduction of the euro has been recognised as a remarkable success not only in europe, but across the entire world. since then, monetary union has been effective and very successful in providing the right framework for europe to be performing and to create jobs. however, given the modest growth performance of the european countries and of the euro area in the past, improving structural factors to raise european competitiveness remains a major policy issue. it is essential to overcome these constraints to growth in the current environment, where the european economy is facing a number of important challenges, including rapid technological change, accelerating globalisation and ageing populations. the successes of economic and monetary union ( emu ) with the introduction of the euro, a completely new monetary policy framework was introduced in europe, with the ecb conducting a single monetary policy for the entire euro area. despite the uncertainty that surrounded the transition to this new regime, the ecb and the euro have benefited from a very high level of credibility since the very first days of emu. this achievement certainly rests on the constituent features of the ecb ’ s institutional architecture, which gives a clear mandate to the ecb to safeguard price stability in the euro area, and grants it full independence in pursuing this mandate. central bank independence is key for monetary policy to be credibly and effectively geared to price stability. from the very beginning, the successful launch of the euro and the strong credibility of the newly created monetary authority led to an impressive convergence of market interest rates at all maturities to the lowest interest rates prevailing prior to the euro. of course, the credibility of the ecb in delivering price stability has to be maintained over

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