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Reception for the members of the Governing Council of the European Central Bank


May I first of all bid you all a very warm welcome to Schloss Bellevue. To have so much personal monetary history and policy gathered in one room is something special. Responsibility for the stability of our common – and so successful – currency, the euro, is in your hands at this very difficult time.

I would like to thank ECB President Trichet for our frank talks and for his committed work as President, and to wish Mr Draghi every success when he takes over on 1 November 2011.

Europe is a bold, a unique project. It relies on common efforts and the will to engage in cooperation based on partnership to foster peace, freedom and prosperity.

Almost 60 years ago, the statesmen Monnet, Schuman and Adenauer had the courage and farsightedness to work towards lasting reconciliation among European nations. Along the road to European integration, setbacks and problems arose time and again. However, they were always resolved together. Crises were seen as opportunities. That is the essence of the European idea. That’s the way it has to be, even in the current situation. Germany is committed to Europe and to the euro.

Berlin seems an appropriate place to remind you of the profound social changes which, on the whole, the countries of Central and Eastern Europe have mastered very successfully since the fall of the Berlin Wall and the sweeping away of the Iron Curtain. They have admirably displayed the ability to change which has made Europe what it is.

Europe is a much more bigger project than the current challenges presented by the economic and financial problems would sometimes lead us to believe. If we tackle the root causes of the bank and debt problems, Europe will emerge strengthened from this crisis.

A stable monetary union is in Europe’s interest, as well as in Germany’s national interest. As the most populous and an economically strong member state, Germany believes it has a special responsibility. We will remain committed to this conviction.

Major decisions which will require courage lie ahead. Everyone who has a role to play is working flat out to safeguard the euro. Germany believes it has an obligation to offer its solidarity, that’s to say to help others to help themselves.

Not everyone is aware of the situation we find ourselves in. The politics of brinkmanship has reached its limits. Yet, in the long term we cannot ignore the laws of economics. We Europeans have to be bolder and take control.

This is about more than temporary financial and economic crises. Every member state in the EU has reaffirmed its will to adapt spending and to consolidate their budgets. I’m convinced that we all have to, and indeed will, return to the stability criteria of the monetary union. And that we will succeed if we work together.

It’s in our own vital interests to pursue sound financial policies and we have an obligation to adhere to the stability guidelines which we jointly adopted. The principle of “pacta sunt servanda” is part and parcel of universal international law as well as European constitutional law. If everyone abides by the rules, confidence in European institutions will endure.

Credibility and confidence are the most important currency reserves of any central bank. The central banks rightly emphasize their independence. It is a valuable asset which is laid down by law and anchored in our treaties. It’s essential for ensuring that the ECB can fulfil its primary task, namely guaranteeing price stability. The ECB and the central banks must focus all their efforts on this mandate.

I welcome the consensus now reached that the Stability and Growth Pact should be made more effective and that the demands on the economic and financial policies of the member states should be increased. The possibilities for imposing sanctions have also been stepped up. This reform will be successful if everyone plays their part and shoulders their responsibility in full.

Europe has now strengthened the monetary union’s institutional framework, established a euro rescue package, which is to be enhanced now, and agreed on a permanent crisis mechanism. The instruments available from now on must be used in such a way that they bolster responsibility and budgetary discipline in the member states. Financial assistance in crises is already being granted on a temporary basis and subject to conditions. The principle of the member states’ responsibility for their own financial policy remains a crucial and necessary element of monetary union. Everyone agrees that large-scale financial transfers are not a solution.

We can best protect our democracy and independence if we quickly end the spiral of ever higher public spending and higher debts and stop the policy of cheap money. Solidarity in Europe means leaving coming generations opportunities and the freedom to shape their future. That’s intergenerational equity. We Europeans have to return to our own principles of an open, free and social market economy.

This crisis is not only an economic and financial crisis but, in essence, a crisis of confidence. Crises always present an opportunity to address weaknesses and to attempt a fresh start. We can master the situation if our will to act is strong. We Europeans have to take action, otherwise we will lose our independence, influence and freedom to act. I’m certain that as a stability union, the European monetary union will endure and that Europe’s voice will remain convincingly loud and clear.