concerns about consequences of emissions from burning fossil fuels for climate change, have stoked demand for alternative, potentially cleaner, energy sources such as bio fuels, prompting production to switch from food to fuel crops and further adding to the pressure on food prices. other factors are also playing a role in driving global commodity price developments – supply disruptions owing to unfavourable weather conditions have also made the food shortfalls more acute. differing competitive conditions in the retail and distribution sectors have contributed to diverging patterns in price changes across countries. that aside, the example serves to illustrate that the current collection of shocks facing the world economy cannot be viewed in isolation and that the interactions are varied and numerous. the pressure on global commodity prices is, of course, just one facet of the globalisation process affecting economic developments. we cannot provide a comprehensive picture of the impact of the globalisation without also acknowledging the dis - inflationary effects associated with the attenuation in prices of imported manufactured goods in recent years. increased trade with low costs countries and the growing share of these countries in the rest of the world ’ s imports has in particular put downward pressure on developed economies ’ manufacturing import prices over the past decade. the net effect of these two forces – the attenuation in imported manufacturing goods ’ prices and the accentuated increases in commodity and food prices – is difficult to judge ; the effects also differ across countries. however, a tentative consensus seems to have emerged amongst economists and academics that in the recent past the overall effect of globalisation has been a small net dampening of euro area inflation. the outlook is perhaps more uncertain : indeed, there have been recently signals that the dis - inflationary impact of low - cost countries on euro area import prices may be weakening. inevitably, the process of unpicking and understanding shocks and complex interactions affecting the economy is an ongoing task. and that raises the challenging question of how the monetary policymaker should respond to this changing environment. clearly we need to be sure that the analysis underpinning policy decisions incorporates an appropriate understanding of the complexities of our global system. the success of monetary policy at the ecb depends on our ability to take into account – in our economic and monetary analysis – this rapidly changing environment. but while our analytical processes have new challenges to cope with, the responsibilities are unchanged. challenging as the present global economy may be, the rules for monetary policy - making are not altered. also in our globalised world, inflation is a monetary phenomenon

treaty. it would have been a bis central bankers ’ speeches consequence of the central bank renouncing to apply strictly and in full the provisions of the treaty. the ecb ’ s support for greece is based on its statute but also on the assumption in the treaty that the status of each member of the euro area remains inviolate. indeed, the same conviction and the same independence from the political process led us in the summer of 2012, when the sovereign debt crisis endangered the integrity of the euro area, to resolutely declare our determination to defend the single currency. to sum up, the balance we achieved with our interventions during the greek crisis was fully within our mandate ; it respected the political commitment to the single currency contained in the treaty, but at the same time we implemented that commitment within the limits of our statute. conclusion the ecb ’ s response to the exceptional challenges posed by the crisis has preserved the integrity of money in the euro area. monetary stability is however only one necessary condition for the prosperity of the economy. indeed, so much attention has been paid to our commitment to a sound currency that, to paraphrase galbraith, little thought has been given to other things. we must now look ahead, and move from stability towards prosperity. we need a new pact that prevents the re - emergence of the type of challenges we have addressed, and that above all strengthens the constitutional architecture of the euro area. this is not a new conclusion. it was already reached in the summer of 2012, when the european council mandated the president of the council, the commission, the eurogroup and me, and subsequently the president of the european parliament, to outline a credible path that completes our monetary union and makes it “ more perfect ”. since then, we have made various proposals, all of which go in that direction. i hope that what i have said to you today will convince you of the urgency of this reflection, of the need to turn it without undue delay into an institutional process able to secure concrete results, in line with a clear calendar for action. this is a long and complex journey which can only be based on the strong determination of the member states. bis central bankers ’ speeches