and capacity to act in cases of market turbulence. but i duly recognize there are other proposals on the table as well. one is to change the name of the esm to european monetary fund, emf. would this be justified? to my mind the nameplate is less important than the substantive improvements in the functioning of the esm. besides, the esm has become a positive, solid brand, based on the high integrity and professional quality of the institution and its staff, under the competent leadership of its managing director, klaus regling. another reform proposal relates to the institutional dimension. to increase accountability, the european commission has proposed to transfer the esm into the eu treaty and put it under parliamentary control of the european parliament, in a rather similar way as the ecb is – mostly focusing on the full right of demanding and receiving information. on the other hand, the commission proposal would maintain the key policy decisions and executive functions in the hands of the board of governors. this includes the decisions to approve of conditional financial programmes and the appointment of the managing director. hence the commission proposal is actually less of a great federalist leap forward than some fear and others wish. in principle, there are two alternative ways of making progress in european cooperation, either by the well - tested community method or by the intergovernmental method, which some years ago was described as the union method. for the eu to continue making legitimate progress in integration, in my view it is necessary to take good care of the community method, since it is able both to provide the effective capacity to act and the legitimacy to take decisions. it is based on the commission ’ s right of initiative, its independence and professionalism, the qualified majority rule in the council and co - determination by the european parliament. it enables the union to take decisions and keeps all member states – including the small states – on board. revisions of fiscal rules : the expenditure rule let me turn to my third and final subject : the revision of fiscal rules, in particular by introducing the expenditure rule into the eu fiscal rules. in the future, the economic and monetary union can work smoothly only if the public finances of all member countries are credibly on a sustainable footing. a combination of fiscal policy rules and market discipline related to government borrowing is necessary to ensure this. fiscal rules should be sufficiently simple to ensure that, in normal circumstances, we can be certain in advance that they will be adhered to when budgets are prepared. the expenditure rule can

terms of macroeconomic policy, the tide has now turned. after a decade of low inflation, we moved last year very quickly to a period of high inflation. the inflation surge was driven by multiple factors : quicker than anticipated recovery from the covid19 pandemic, global supply chain bottlenecks exacerbated by renewed china lockdowns and, in the case of energy and food, russia's illegal war in ukraine. the ongoing monetary policy normalisation is a response to the dramatically changed inflation outlook. in the united states, the tightening of monetary policy began in march. so far, the fed has conducted two 75 basis - point hikes, placing the fed funds target range between 2. 25 % and 2. 5 %. it has also started to reduce its balance sheet. the ecb, in turn, announced in june its intention to raise interest rates in two instalments, first in july and again in september. in july, we raised the key ecb interest rates by 50 basis points. this was more than had previously been signalled, because the june inflation figures showed an even greater increase than we had anticipated, and so we determined that it 2 / 5 bis - central bankers'speeches was appropriate to take a bigger first step on the normalisation path. going forward, the ecb's interest rate decisions will be data driven, aiming for 2 % inflation in the medium term, in line with our strategy. let me next turn to central bank digital currencies. at the ecb, as in a number of other central banks across the world, we are looking into the possibility of introducing a cbdc, a digital euro. the investigation phase started in late 2021 and is expected to be concluded in october 2023. once the investigation phase is completed, we will decide whether to embark on actually building a digital euro. it is important to note that a digital euro would complement cash – not replace it – by allowing central bank money to be used in digital form also for retail purposes. we will continue to safeguard citizens'access to and the usability of cash across the euro area, even though its role as a medium of exchange has been diminishing rapidly, at least in some countries. a digital euro would give people an additional choice about how to pay and would make it easier to do so in an increasingly digital economy. it would expand the availability of digital central bank money beyond transactions between banks to include everyday peer - to - peer payments