other and only influencing each other through commercial competition or power struggles, but it is : a new spirit – stemming from philosophy and the sciences based on it – a spirit of free criticism, providing norms for infinite tasks, and it dominates mankind creating new, infinite ideals ”. the second is the vision of paul valery. he stresses the spiritual character of europe in his essay “ l ’ europeen ”. in 1924 he wrote : “ wherever the names caesar, gaius, trajan and virgil, wherever the names moises and st. paul, wherever the names aristotle, plato and euclid have a significance and carry weight, that is where europe is ”. here in aachen, i would say wherever the name of charlemagne carries weight, that is where europe is. particularly in these times of global challenges, of stress, of crisis, such a return to the “ spiritual form of europe ” is enlightening. husserl concluded his lecture in a visionary way : “ europe ’ s existential crisis can end in only one of two ways : in its demise ( … ) lapsing into a hatred of the spirit and into barbarism ; or in its rebirth from the spirit of philosophy, through a heroism of reason ( … ) ”. i think that [ eventually ] a confederation of sovereign states of a new type, with new institutions to manage the interdependence of today and tomorrow, would be fully in line with such a heroism of reason. * * * the city of aachen has a special significance for europe as a whole and also for the peoples of france and germany. nearly 60 years later, i too have the honour of receiving the karlspreis as president of the ecb, being also a “ frenchman on german soil ”. bis central bankers ’ speeches as a french citizen on german soil, i do not forget the start of the european endeavour, with the speech of robert schuman. this endeavour was founded, in particular, on the ties between our two countries, put to the service of all other nations and of europe as a whole, the deepening integration of our economies and currencies, and ultimately the common bond of the euro. it has been a great privilege that the path of my career has allowed me to participate in this historical endeavour. in the almost eight years i have lived in germany, i have developed a strong admiration for the country, its culture and its history. germany combines local, regional and national identities with a strong

, where such credit has been available, has spiked, and liquidity has dried up in many markets. one money market fund's losses forced it to " break the buck " – that is, the value of its assets fell below par – an event that triggered extensive withdrawals from a number of money market funds. those funds responded to the surge in redemptions by attempting to reduce their holdings of commercial paper and large certificates of deposit issued by banks. some firms that could not roll over maturing commercial paper drew on back - up lines of credit with banks just as the banks were finding it even more difficult to raise cash in the money markets. at the same time, a marked increase in the demand for safe assets – a flight to quality and liquidity – resulted in a further drop in the value of mortgage - related assets and sent the yield on treasury bills down to a few hundredths of a percent. developments during the summer pressured not only nonbank financial firms, but also a number of depository institutions, including washington mutual ( wamu ) and wachovia. in recent weeks, these two institutions suffered deposit outflows and reduced access to wholesale funding. the office of thrift supervision, wamu's regulator, closed that company and appointed the federal deposit insurance corporation ( fdic ) as receiver ; the fdic immediately sold the institution to jpmorgan chase. in the case of wachovia, to avoid serious adverse effects on economic conditions and financial stability, the secretary of the treasury, in consultation with the president and on the recommendation of the federal reserve and fdic, authorized the fdic to use its funds to facilitate the sale of that company's banking operations without loss to creditors. both citicorp and wells fargo have offered to buy the company and negotiations are continuing. most importantly, however, in either case all depositors and creditors of wachovia are fully protected, and depositors and other customers will experience no interruption in banking services. by potentially restricting future flows of credit to households and businesses, the developments in financial markets pose a significant threat to economic growth. the treasury and the fed have taken a range of actions to address the very tight funding conditions that now prevail. for example, the treasury implemented a temporary guarantee program for balances held in money market mutual funds, helping to stem the outflows from these funds and thus reducing their need to sell assets into already distressed markets. the federal reserve has taken a number of steps