and in 2014, but as of the spring of 2014 we saw another slowdown in growth and were at risk of running into a third recession. in january 2015, ecb president mario draghi announced that the ecb would pursue a policy of quantitative easing : we now print money and pump it into the economy in order to help ease credit conditions. were it not for the monetary policy of recent years, we would certainly have landed in a deep recession. the euro area might have fallen apart and that would have been a catastrophe. the ecb therefore did what it had to do, but monetary policy cannot resolve all problems. we have always said that politicians have to do their job. they must carry out structural reforms, reduce government debt and create a more flexible labour market. that would contribute to a smoothly functioning economy. owing to ecb policy, interest rates are extremely low, there ’ s no longer any return on savings. so people are tempted to take more risks with their money, by buying shares or real estate for example. this pushes up prices and may give rise to bubbles that suddenly burst, resulting in serious financial disasters. is that a real danger? absolutely, that is an important point. the ecb ’ s policy undoubtedly has unintended consequences. in some countries, there is a risk that real estate prices or some equity and other financial markets are increasing in a way that is too rapid or artificial. we are keeping a close watch on that and interventions to avoid bubbles are possible if need be. the emergence of bubbles is a justified concern. but if the ecb were not pursuing its current policy, the financial concerns would be even more serious because the economy would be in poorer shape. when and how are we going to move back towards normal interest rate levels? what needs to happen before the ecb will start to discontinue its exceptional policy? bis central bankers ’ speeches the ecb will continue pursuing its policy for as long as necessary. what needs to change before we adjust the policy? to put it simply : the rate of inflation needs to move sustainably towards 2 %. looking at the current economic situation, i think that the present policy will continue until at least 2017 and for longer if necessary. what if ecb policy ultimately doesn ’ t work as in japan? will you propose “ more of the same ”? or is there a plan b? there is no plan b, there is only one plan. the ecb stands ready to take all measures

iv ) as a fourth feature, economic integration and convergence is also reflected in the fact that current inflation and output growth differences among euro area countries are relatively limited by historical standards. the differences also appear to be similar to those observed across regions or states within the united states. 7 i understand that some observers may like to create headline news from the differences in economic growth or inflation between some euro area countries in a specific quarter or year. but let me stress that it is absolutely normal in a monetary union, such as the euro area, for economic developments to differ across individual regions. this is also the case among regions in the united states. why is it normal? first, differences in growth rates and inflation may be related to catching - up phenomena. a region which is relatively underdeveloped would, if not hindered by bad economic policies, be expected to grow at a rate above the currency area average and thus, over time, reach an income per capita level similar to the currency area as a whole. this process is highly welcome. second, there are countries that are more advanced, in terms of structural reforms, than others and have therefore a higher growth potential. third, a country or region might also be exposed to country or regionspecific shocks. this specific shock may cause a growth or inflation differential, which is also normal in any monetary union. however, it is also true that persistent differentials which reflect structural rigidities are a concern. i will address this issue later. v ) equally relevant for the conduct of the single monetary policy of the ecb is the fifth and final feature of economic integration i would like to mention to you. the degree of synchronisation or co - movement between the different cyclical positions across the euro area countries seems to have increased since the beginning of the 1990s. in other words, a large number of euro area economies now share similar business cycles. 9 the increased co - movement of business cycles across the euro area economies has resulted from a continuous process of integration. the move from several currencies to a single currency has meant the elimination of exchange rate risk between countries in the euro area. the euro has also reduced information costs and has enhanced price transparency. this, in turn, has fostered competition and market integration. in this way, the adoption of the euro has acted as a catalyst for the single market, within which goods, services, people and capital are to move freely. ludwig erhard said “ a free market can