their characteristics, shari ’ ah compliant financial products can enhance the stability of the financial system. shortcomings in standardization and liquidity management must be tackled, however. cooperation between investors, issuers and regulatory and supervisory authorities is a prerequisite for a successful integration beneficial to all stake holders. luxembourg with its tradition as a specialized financial center will continue its endeavors to establish an international hub for islamic finance.

remain for the future. i will divide my remarks in three parts. first, the immediate challenge is to implement exit strategies from the current extraordinary monetary and fiscal measures. second, a longer term challenge is to design and implement financial reform that effectively mitigates systemic risk. finally, i will discuss some new ideas advanced within this process of reform. 2. 1 immediate challenge : monetary and fiscal exit strategies first, let me consider the exit strategy from current extraordinary monetary measures. as i mentioned before, there are signs of substantial improvement both in financial markets and in the real economy. these suggest that the eurosystem extraordinary liquidity measures are not all needed to the same extent as in the past. however, unwinding of enhanced credit support must be both timely and gradual. it must be timely because there are risks associated with acting either too early or too late and it must be gradual because the situation is only improving progressively. the process of withdrawal is facilitated by the fact that many of the non - standard measures were designed to phase out naturally over time unless renewed by explicit policy decisions. for other measures, the situation has improved sufficiently for governing council to initiate the gradual process of withdrawal. the cornerstone of the exit strategy is the ecb primary objective of price stability in the medium term. this has guided the introduction of enhanced credit support and will govern the process of withdrawal. as with the monetary policy strategy, the exit strategy cannot precommit governing council to a given timing or sequence of actions. these must be decided with reference to changing economic and financial circumstances. now i wish to briefly address the exit strategy from the current fiscal stimulus. in addition to government measures supporting the financial sector, the extraordinary fiscal stimulus and the so - called automatic stabilisers have substantially deteriorated public finances during the current economic crisis. according to autumn 2009 forecast of the european commission, the deficit ratio in the euro area should reach 6. 9 % of gdp in 2010, while government debt is expected to reach 84 % of gdp in 2010. these significant fiscal imbalances undermine public confidence in the sustainability of public finances, which may place an additional burden on monetary policy in maintaining price stability. as stressed by the ecb governing council, national governments must abide with the ecofin council agreement to communicate timely, ambitious and credible fiscal exit strategies as soon as possible. the fiscal consolidation process should be transparent and should be guided by the rules of the stability and growth pact ( sgp ). current government commitments to start consolidation in