Dinner speech at Zappeion on the occasion of the ECB Governing Council meeting hosted in Athens by the Bank of Greece
08/05/2008 - Speeches
Your Excellency Mr Prime Minister,
President of the European Central Bank,
Speaker of the Parliament,
Minister of Economy & Finance,
Commissioner,
Dear Colleagues and friends,
It is a great pleasure to welcome
you to Greece on the occasion of todayΆs meeting of the ECBΆs Governing Council.
Let me say a few words about the
location of tonightΆs dinner, the Zappeion Hall. It was built in the second half
of the 19th century as a center to host cultural exhibitions modeled after the
Crystal Palace exhibition hall that was part of first WorldΆs Fair, held in
London in 1851. The architecture is neoclassical, with a Corinthian portico, and
an organization of spaces that is fully in harmony with the purpose for which it
was built. The building, inaugurated in 1888, was used as the Olympic Village
for the first of the modern Olympic Games in 1896. The building also has a rich
political history. In 1979, the signing of the Treaty of Accession of Greece
into the European Economic Community took place here.
The meetings of the Governing
Council that take place outside of Frankfurt twice a year serve an important
function. These meetings allow the Governing Council to conduct its normal work
activities while strengthening the cooperation and relations among our
respective institutions. The meetings underline the cohesiveness of the
Eurosystem and serve as a reminder that the system belongs to all euro-area
citizens. Intimate cooperation among the members of the Eurosystem team, the
national central banks of the system and the ECB, is the key to the success of
the single monetary policy of the euro area. In this regard, let me mention
that, as a member of the Eurosystem family, the Bank of Greece has enjoyed
excellent working relations with all the members of the Eurosystem over the
years.
The euro has been a major success in
so many respects. Despite the skepticism that surrounded its birth, on June 1st
the ECB will celebrate its 10th anniversary, with its standing high. At all
levels, the euro has delivered the goods. At the level of economic performance,
its creation was intended to promote a macroeconomic environment in which
countries could thrive in an increasingly competitive market place. The euro
areaΆs track record in terms of inflation performance, low interest rates,
employment creation, financial-market integration, and trade expansion
demonstrate conclusively that the original objectives of the single-currency
area are being fulfilled.
Furthermore, the euro has eliminated
the potential risk of exchange-rate crises involving national currencies, to
which many of our economies were previously exposed on a daily basis in a world
characterized by free capital flows. Moreover, the euro is now established as
the worldΆs second most important currency, the significance of which is not
lost upon a central banker. In effect, small countries, such as Greece, have
traded in the vulnerability associated with the free movement of capital for the
greater security and credibility provided by a major international currency and
its central bank.
At another, no-less-important,
level, the euro is a symbol of shared values and a common objective - - the
objective of bringing our citizens closer together in an environment in which
they can prosper.
I need to add, however, that the
benefits of a single currency and a credible central bank do not come
automatically. They depend to an important extent on the economic policies
pursued by the euro area countries themselves. From a national perspective,
therefore, the challenge is to maximize the benefits of participation in a
monetary union by making further progress on the path of reform.
For Greece, it is particularly
important to bring down the relatively high inflation rate in order to improve
its competitive position. To achieve this objective, it is particularly
important to continue on a sustainable and credible path to fiscal consolidation
and to improve fiscal performance by reducing the countryΆs high government debt
ratio. In particular, public finances should have sufficient room for manoeuvre
in order to better cope with expected substantial increase in age-related
expenditures. It will also be important, in both the public and private sectors,
to attain moderate labor cost developments that take into account productivity
growth, labor market conditions, and developments in competitor countries.
Attention must also focus on overcoming the structural constraints on economic
growth and job creation, notably by fostering labor force participation. In this
regard, the strengthening of competition in product markets, which will help
keep profit margins at levels consistent with price stability, and improvements
in the functioning of labor markets, are key elements in raising potential
growth.
For fifty years, the EU and its
predecessor organizations have brought peace and stability to the member states.
The single market and EMU have built on that achievement by creating an edifice
on which European economies can grow. By continuing to work together as a team,
we will be able to ensure ever-more prosperous lives for our citizens.
Let me not take up any more of your
time, but let me wish you an enjoyable time during the remainder of your stay
here.
Ladies and Gentlemen, thank you for
your attention.