Contribution to Bild am Sonntag
By Jean-Claude Trichet, President of the ECB,
15 May 2011
Our currency, the euro, has all what it takes to be an anchor of stability and confidence. The euro unites 331 million citizens of a region that is among the most prosperous in the world.
For over 12 years now, the European Central Bank – together with all national central banks including in Germany the Bundesbank – has been delivering what it is expected to deliver: price stability in the euro as a whole over the medium-term, with an average annual inflation of less than 2%. In Germany the average yearly inflation has been 1.5% which is a better result than for any such 12 year period over the last 50 years. Thereby, we have been safeguarding the euro’s purchasing power. This has been achieved despite some headwinds to the European economy: oil prices went up; the internet bubble burst; violence and wars have raged in some parts of the world; and starting in 2008 we had to cope with the most severe global financial crisis in over 60 years.
We can be proud to have a stable and credible currency. There is no crisis of the euro. Instead, what we are currently observing in parts of the euro area is first and foremost a fiscal crisis. Several member states of the euro area have to adjust rigorously their economic and fiscal policy after having made mistakes in the past. All member countries must respect the principles of prudent fiscal policies. Substantial reforms are needed to ensure that common rules are improved and respected by all.
The current period is still not easy. The citizens can trust that the ECB will ensure price stability in the years to come as we did in the last 12 years. We are on the side of citizens. We know that inflation hurts the weakest members of society most, and we will do all that is necessary to prevent inflation. The euro is the European response to economic integration and globalisation. It is a currency that the citizens can trust.