, the orderly depreciation of the peso has been supported by a solid macroeconomic position, the mechanisms that have been implemented to provide liquidity to the foreign exchange market, the high level of international reserves, and the fcl agreement currently standing with the imf. what have been the implications of these developments for economic growth and inflation in mexico? naturally, the difficult external environment has adversely affected economic growth. in the face of weakness in industrial production in the us, and an even more complicated situation in the rest of the world, manufacturing exports have remained flat over the course of 2015. consequently, the upturn in economic activity observed in 2015 is mostly explained by domestic demand. 3 on the one hand, the increase in employment, the recovery of real wages made possible by low inflation, higher remittances in peso terms and the expansion of bank credit have stimulated private consumption. at the same time, private investment, mainly in machinery and equipment, has shown an upward trend. when seen from the supply side, services has been the leading sector, as industrial production has been affected by the decline in oil output and stagnation of this sector in the us. it is reasonable to expect the continuation of a gradual strengthening of economic activity in 2016 and 2017. the anticipated revival of industrial output in the us, coupled with depreciation of the peso, should reflect in the evolution of manufacturing exports. in addition, consumption growth would be supported by a favorable behavior of its main determinants. by enhancing confidence, the expansion of exports and consumption should provide additional stimulus to private investment. the latter would also be underpinned by the ongoing efforts of structural reform. on the other hand, it is important to note that downside risks for growth persist, and that a negative output gap is expected to prevail until the end of 2017. since early september 2014, the canadian dollar and the norwegian crown have depreciated, respectively, by 29. 8 and 41. 7 percent against de us dollar, while a basket of eme currencies excluding the mexican peso ( the sample includes the currencies of brazil, chile, colombia, hungary, indonesia, malaysia, peru, poland, russia, south africa and turkey ) has depreciated between 44. 2 ( simple average calculation ) and 59. 7 percent ( gdpweighted average calculation ). even though, from a national accounts perspective, the external sector has continued to contribute positively to real

benoit coeure : the “ fourth stage ” of emu – laying the foundations for a sustained recovery speech by mr benoit coeure, member of the executive board of the european central bank, at the interparliamentary conference on “ economic governance of the european union ”, in the context of the european parliamentary week, brussels, 21 january 2014. * * * i would like to thank jean - francois jamet and marion salines for their contributions. i remain solely responsible for the opinions contained herein. mr president, mr meimarakis, honourable members, ladies and gentlemen, this month, we celebrate the 15th anniversary of the introduction of the euro, marking the start of the third stage of economic and monetary union ( emu ). we now know that this was not the final stage. the crisis and subsequent adjustment have created considerable uncertainty and social hardship. yet, there are encouraging signs that the situation is changing and that europe is gradually moving towards recovery. fragmentation has significantly receded in euro area financial markets. what we need now is to create the conditions for a sustained recovery. and we all have a role to play. first, in nurturing a still weak and uneven recovery. the ecb has a key role to play in this respect. second, in creating conditions for sustainable long - term growth. and finally, in enhancing democratic accountability and developing a shared vision of the future of european integration. the contribution of monetary policy and banking union improving the financing of the economy will play a vital part in the recovery. the ecb had an essential key role in this respect throughout the crisis. the ecb was faced with interrelated key challenges, namely deleveraging, fragmentation and a weak economic environment. like other central banks around the globe, we have taken decisive measures to ensure the proper transmission of our monetary policy. we have reduced the key interest rate to a historic low. we have stated that, in view of the subdued outlook for inflation, we expect interest rates to remain at current or lower levels for an extended period of time. we are fully committed to maintaining price stability over the medium term, that is, inflation below, but close to, 2 %, and we have been absolutely clear that our inflation objective is symmetric : low inflation is as bad as high inflation. there are already indications that we are making significant progress in reintegrating financial markets.. it is true that the improvement in financial conditions is not reflected to the same extent in all euro area economies