. only a small part of the programme is subject to risk sharing among the central banks of the eurosystem. additionally, the governing council decided on limits for the eurosystem ’ s purchases of individual bond issues and for its overall purchases of debt of any individual 3 / 7 bis central bankers'speeches country. this is designed to ensure that governments continue to rely on the capital markets for their funding. these measures make the qe programme less problematic than earlier sovereign bond purchase programmes that aimed to reduce the risk premiums of individual countries. nonetheless, one important risk of sovereign bond purchases remains. the national central banks have become the most important creditors to their governments, which might ultimately put the independence of monetary policy at risk. exiting its ultra - loose monetary policy would influence governments ’ financing conditions much more directly than our conventional monetary policy instruments. and the pressure might rise on the eurosystem to keep funding costs low in order to ensure the sustainability of public finances. if one adjusts the recent deficit figures for the currently favourable business cycle, one cannot fail but see that consolidation has in effect stalled in the euro area member states. the european commission expects practically no improvement in the structural balance this year and next. and there is the risk that the current low interest rates might make public finances appear to be in better shape than they actually are. high public debt ratios can become a burden when interest rates begin to rise again. in the european monetary union, however, fiscal discipline is absolutely essential. the set - up of the monetary union can further compound the tendency of governments to finance their spending through debt, as the consequences of bad policy choices can more easily be externalised to neighbouring countries. 4 monetary policy and heterogeneity ladies and gentlemen when comparing us and european monetary policy, the institutional set - up is not the only difference that springs to mind. in the euro area, monetary policy is complicated by a higher degree of heterogeneity compared to the us. let ’ s take unemployment : in the euro area, the weighted standard deviation of member states ’ unemployment rates from 2009 to 2017 is 5. 7 percentage points. in the us, the weighted standard deviation is only 1. 2 percentage points for the same period. heterogeneity was higher pre - crisis as well, at 2. 2 percentage points from 1999 to 2008, compared to 0. 8 percentage point in the us. a common monetary policy in a currency union means that one size has to fit all –

would agree that no monetary policy strategy should be set in stone. instead, it should adapt to changing circumstances, and circumstances have certainly changed over the past 18 years. in this sense, our current review should translate this strategy to the challenges of our time. 3 personal relationship otmar, with your firm commitment to monetary stability and central bank independence, based on your strong academic reasoning, you should serve as a role model for every central banker. and you have personally given me guidance and advice on numerous occasions as well. 1 / 2 bis central bankers'speeches even in my days as a student, i became well acquainted with your perspective by studying your textbooks. i preferred your books to others because they offered better explanations of the intricate interrelations of monetary policy and also introduced the reader to the challenges and issues of practical monetary policymaking. many years later, i had the privilege of working together with you personally. in the aftermath of the global financial crisis, you chaired the working group neue finanzmarktarchitektur. this working group was convened by chancellor angela merkel and was better known as the issingkommission. its task was to prepare the german agenda for dealing with the financial crisis for a packed series of g20 summits over the subsequent years. it was a very intensive and productive time that i remember vividly. today, i enjoy being able to exchange ideas about monetary policy and central banking with you – sometimes as a sparring partner. when we converse over the phone, i feel that we see many things from a very similar perspective, but what makes these exchanges so valuable and engaging is the sharpness of your intellect. and for this i offer my sincerest thanks. 4 conclusion although you already celebrated your 85th birthday a few weeks ago, i would nevertheless like to take this opportunity to wish you many happy returns as well as continued good health and vitality. your word carries weight beyond our country ’ s borders, even to this day. i hope that we will continue to hear your clear, credible, and authoritative voice in policy debate for many years to come. thank you and all the best! 2 / 2 bis central bankers'speeches