in many different places I got to hold speeches over the years - but today's framework is a special one.

I am talking to a very great honor, at an event that takes place every year since 1545. We central bankers are happy to boast of our long-term orientation, but 466 years are a matter for us a deeply impressive time!

I express my sincere thanks for the invitation.

I am glad that I can share in the long tradition of maritime, business and political life of your city.

This banquet is unique. Not only in Germany but throughout Europe. Since one can only be once in a lifetime in the Schaffer meal as guests, we enjoy every minute to the fullest.

I would therefore like to thank you on behalf of all guests present.

* * *

Even the name of the city - Free Hanseatic City of Bremen - proudly announces its long tradition of independence. Independence in its history, never meant isolation.

On the contrary, the size of this city has its roots in the Hanseatic League. The Hanseatic is an early example of the principles on which the European Union.

Such as the principle that the business and cultural exchange promoting common interests between peoples, facilitating compromises and develop cooperation.

The Hanseatic cities embodied the principle of "doux commerce", later on Montesquieu wrote, "Nations engaged in trade with each other, develop a mutual dependence. Union is founded on their common needs. "

Monetary matters were for centuries part of the flourishing trade. Not infrequently, a single currency was created. Over a long period of 14 to 16 Century possessed, the most important Hanseatic towns - Lübeck, Hamburg, Luneburg, Wismar, Rostock and Stralsund - as part of the Wenden Minting a single currency, the fount cross marks.

Today, the number of major port cities, will be paid where a common currency, much greater: the old Hanseatic city of Bremen, Hamburg, Lübeck, Rostock, Wismar and Tallinn all located in the euro area, as well as Helsinki, Rotterdam, Antwerp, Bordeaux, Cadiz , Porto, Marseille, Genoa and Venice, to name a few.

The European single market covers a vast economic area. The euro area is a truly continental economy. Its population is 331 million, slightly higher than that of the United States and the geographic distance between Lisbon and Helsinki is almost as big as the one between Los Angeles and New York.

Interestingly, the European Union as a whole and in particular the euro area in terms of trade and finance much more open.

The year before the crisis, 34% of GDP in the euro area have been imported or exported. In the U.S. the corresponding figure was 24%. With a share of 15% of world trade - which is 50% more than the corresponding share of the United States and China - the euro area is a world leader in exports.

In the area of international finance, Europe has a remarkable degree of openness. 2009 brings the international assets and liabilities of nearly 170% of the gross domestic product, compared to around 140% in the United States and about 80% in Japan. Domestic and foreign direct investment by 47% and 39% of GDP is significantly higher than in the United States. There are two values account for less than 30%. The degree of openness of the euro area economy is remarkable indeed.

Here in Bremen I would say the euro continues the best tradition of the Hanseatic League: World openness.

* * *

The maritime traditions of Bremen touch me very much. The roots of my family are in Saint-Malo in Brittany. I therefore share your passion for sailing and the sea completely.

In fact, I often use metaphors from the marine, to characterize the European Monetary Union. I have argued that it is better to be on board of a large ship as a solid in a small boat - especially in the turbulent wake of the recent years.

As guardian of the single currency, the European Central Bank knows that it must stay on course. Our compass has only a needle - and this points to price stability. Currently we are seeing a price increase, which is primarily a result of higher energy prices. As I said, both in January and early February on behalf of the Governing Council, the risks to the medium-term outlook for price developments continue to be broadly balanced, but could move up. Therefore, we must always remain vigilant.

* * *

Tonight I want to talk about the fundamental nature of the European Economic and Monetary Union and to highlight achievements such challenges.

Since its seven years, I have the privilege, President of the ECB may not. I can tell you that we have achieved a lot, and all Europeans can be proud of this achievement. But our economic union must be improved in some points.

We must ensure that the monetary union in the country are fiscal policies and general economic policies to the side, which are designed to promote stability and sustainable growth.

We must ensure that all governments have sound public finances.

And we need to ensure sound rules in the economic union that all parties act in the sense of common interest.

All this will serve our common goal: a union marked by the freedom of the individual and collective respect, a union of responsibility and cooperation, and a union of stability and prosperity.
1. The gains of €

First, I would underline the achievements so far. The euro was introduced to the economic and monetary integration among the participating European countries to take account reap the full benefits of economic and political cooperation between these countries and to contribute in this way contribute to lasting peace and friendship between peoples.

All of this in preserving the diversity that makes Europe so unique.

The particular design of our modern economic and monetary union is based on two pillars: an economic pillar and a monetary pillar.

For the monetary pillar are the common currency, the single monetary policy and the euro system, comprising the ECB and the 17 national central banks in the euro area.

The economic pillar is decentralized and the responsibility for the financial and economic policy lies in the hands of individual countries. Higher-level rules to promote coordination and ensure that national economic policies are fully consistent with the fact that we have a common currency without having to be part of a political federation.

If this keeps up properly, it provides a balance between national economic policies and economic interdependence of countries. This balance is the key aspect of economic and monetary union. Thus, the economic sovereignty as a whole is balanced, it is neither exclusively national nor entirely European.

As the Economic and Monetary Union was established, many wondered how a monetary union to function in a Europe of sovereign states would. The answer: it requires a functioning economic union.

This must be an economic union with a single budget policy is not necessarily. They, too, does not necessarily require a completed merger policy. However, there must be an economic union, made in the national budget and economic policies within a coherent framework and subject to effective mutual supervision.

If the question is how the economic pillar can be improved, that's the answer: by stricter rules on mutual surveillance of fiscal policy and general economic policies of member countries.
2. The monetary pillar of EMU

I'd like to reflect more accurately the two pillars. Allow me first to the monetary union. The ECB has a clear mission, namely to maintain price stability. According to our definition, this means an inflation rate of below but close to 2% over the medium term. This is our compass. The medium-term orientation is, figuratively speaking, lead to the helm with a firm hand.

Why can not the citizens rely on the correct course of monetary policy? You need only look at some facts.

In the twelve years since the introduction of the Economic and Monetary Union, the average annual inflation rate was 1.97% in the euro area. None of the major central banks in today's euro area has achieved over the past 50 years, a better result.

As for Germany, the annual inflation rate since the euro's introduction in the average was even lower. In the period from 1999 to 2010 it averaged 1.5%. In comparison, it was in the 1990s before the introduction of the euro was 2.2% per year. In the 1980s it was 2.8% and 4.9% in the 1970s.

The economic environment of the last twelve years by no means always easy. Our focus is currently on the global financial crisis, but also in the years before 2008 we moved not always in calm waters.

In 1999 we built a completely new institution - the ECB - and a new monetary policy framework in which national central banks are working together as a system. we had to deal with the bursting of the Internet bubble, the consequences of the events of 11 September 2001, the oil price increase to U.S. $ 145, rising prices of food and raw materials and finally the worst financial crisis since the Great Depression.

All of these shocks could have inflationary or deflationary consequences. But the citizens in the euro area, our courses have always met with confidence. This is the anchoring of medium-to long-term inflation expectations shows at a level consistent with our definition of price stability.

Observers and financial markets forecast for the coming year price stability and low inflation. For 2011 and 2012, they estimate inflation of just below 2%, and in view of the next five years they are moving on from an inflation rate in height from just 2%.

As you can see from these figures, the monetary policy has fulfilled its role and ensured price stability. It will do so in the future.
3. The economic pillar of EMU

Let me now turn to the economic pillar.

Here, fundamental reforms are required. The Economic Union is the counterpart to monetary union.

A single market with a common currency requires a solid framework for the appropriate management of the national budget and economic policies.

The citizens in Europe, and particularly in the euro area, know this show surveys that about 80% of citizens to express themselves to overcome the crisis for greater economic policy coordination between countries.

This is an important message: the citizens want a greater coordination of economic and financial policies between the countries of the euro area. [1]

European integration has led to the European citizens appreciate cooperation especially in difficult times. The euro area countries are pioneers in this process.

Together on board a ship to be solid, in an ever-closer union - which holds Europe together in stormy times.

Jean Monnet said in 1950 that the chances of closer coordination in Europe emerge in times of crisis, in particular: "Europe will not be made all at once, and not simply by association: it is caused by specific events that create a tangible solidarity."

But what are the conditions for improved coordination? In particular we need two key changes: effective common rules for the relevant fiscal and economic policies and strengthening of sustainable economic growth.

Let me comment briefly on these two areas.
a. Strengthening of economic governance

We need a true quantum leap in European rules on fiscal policy and the general economic policies of member countries. This means clear rules and procedures to keep the country on Stabililtätskurs. If countries differ from sustainable course, much more effective sanctions are needed.

The Stability and Growth Pact should be strengthened fundamentally. This is the framework that was negotiated by the German Finance Minister Theo, not to prevent unsustainable sovereign debt and excessive budget deficits.

We also need a new European framework to monitor the general economic policies of countries in terms of competitiveness, the current account and private borrowing to counter imbalances in the private sector.

Let me explain why the strengthening of the Covenant is so important.

The period 1999-2008 was generally regarded as economic Gutwetterphase. Yet no country has used the euro area this time to his state budget in a way to fix that one could speak of a secure and sustainable fiscal position.

Even worse, decided in 2004 and 2005 the governments to weaken the Stability and Growth Pact. This initiative was led by the biggest economies in the euro area. The ECB expressed its serious concern at that time. Today, the attenuation of the pact by many as a serious misjudgment of the assessment.

But the crisis also provides an opportunity to dar. has exposed the shortcomings of the Covenant vehemently. His weak points in some countries led to such a large fiscal problems, that these effects were for all other countries. It is now our duty to correct these deficiencies.

First of all, have stricter rules for fiscal policy should be established. That compliance should be ensured by effective sanctions and mechanisms.

Second, a new framework is needed to monitor the development of competitiveness and to ensure that if appropriate countermeasures in time. What we need is a sustainable and balanced Will stem growth.

A similar reform package is currently before the European Parliament. The ECB is one firmly believe that the Parliament demands very clear and strict rules. Automatisms during execution of process steps and the imposition of sanctions are an important part. Such stringent European rules for the good of citizens.

In a Union with a single monetary policy and 17 different financial and economic policies is a quantum leap in economic governance is essential. We need an economic union, which fully corresponds to the already achieved monetary union.
b. Promotion of sustainable growth

The second important change regarding the economic pillar of the Economic and Monetary Union is based on the growth potential of Europe. Europe has achieved in the last decade, quite good results. Per capita growth in the euro area in line - taking into account the different population growth - with annual sales of roughly 1% that of the United States. Also in terms of employment, the euro area has been an increase of more than 14 million, compared with an increase of 7.8 million in the United States, significant progress.

These results are encouraging, they are however not enough. Complacency is appropriate in any way. Europe must develop its growth potential continuously. All countries should conduct their structural reforms of pension systems and labor and product markets determined.

Together they have worked out the strategy Europe 2020. Education, research and innovation are a core area, environmental and resource efficiency, a second, and a high level of employment with social cohesion form the third important area.

The European Central Bank supports all efforts associated with the strategy of Europe in 2020 strongly. A specific example is the completion of the internal market for services. From an economic perspective, it is very reasonable that the internal market for services, ie the sector where the majority of the population is active, is fully realized. New growth areas, such as the digital sector, energy and the environment are undoubtedly benefit from more competition and create new jobs.
4. Conclusion

Let me finish. The Economic and Monetary Union was established in twelve years. I stressed the achievements and pointed out the necessary improvements in the framework. With a reasonable economic union, monetary union can function effectively in an existing independent states of Europe. On this goal, the creation of a well functioning economic union, our reform efforts must be focused.

Must be implemented in Europe what Alexis de Tocqueville on America of the 19th Century had so admired. In his opinion, was the size of the country that it was more enlightened than other nations, but rather in its ability to fix its own shortcomings.

When addressing the shortcomings of our framework, we must not let the signs of economic recovery detract from much-needed measures.

Policy makers must not forget that the possible causes for the errors in economic surveillance and still face the challenges to future growth still are.

But we should also result in mind, what we have achieved. In terms of peaceful cooperation between nations, Europe has distinguished himself as a pioneer.

We rely on cooperation and consensus - not confrontation and conflict.

We have associated political freedom with economic freedom and social peace.

These are remarkable achievements. Obviously, objectives, seeking many people in the rest of the world.

For this reason, I've used throughout my career in favor of putting the German-French friendship in the service of Europe as a whole, with all its member countries. So I firmly believe in our economic and monetary union.

The Europe which I have dedicated my entire work is, a Europe in which different countries, regions and cities to preserve what Victor Hugo called the "different qualities or glorious individuality.

There is also a Europe, whose cities, regions and countries know that they - collectively - to achieve even more.