Concluding remarks:

• Financial markets are testing the strength and resilience of the euro area and the willingness and ability of the euro area authorities to preserve the integrity and stability of the euro as a currency.
 

• The institutional response to their challenge has been swift, strong and resolute. As regards monetary policy, the Eurosystem has implemented a set of measures that ensure the provision of liquidity to the euro area financial system, including to the banks of those peripheral countries that are currently subject to the greatest market scrutiny.
 

• With respect to fiscal and macroeconomic imbalances, euro area governments are now strengthening the rules for fiscal and broader economic policy coordination. They have created and are refining facilities that can provide external financial support to those Member States facing the most intense pressures in sovereign debt markets. These developments aim to correct the deficiencies in the institutional architecture of Economic and Monetary Union exposed by the financial crisis. These facilities need to have sufficient resources as well as the flexibility to contain market pressures and coordinate the public and private sectors in order to achieve a sustainable and mutually beneficial outcome in an environment where several equilibria may be possible.
 

• The Asian experience in the mid- to late-1990s demonstrates that radical reform can lead to a sustained recovery, one achieved largely without restructuring public debts. Indeed, one can argue that Asia has emerged from its financial crisis stronger than before: the institutional weaknesses which contributed to the build-up of financial fragilities but were masked by high growth rates during the pre-crisis boom have been addressed.
 

• Similarly, Europe will emerge from its current travails stronger if the weaknesses revealed by the recent financial crisis are properly identified and corrected through institutional innovation and reform. I am confident that this will be the case.
 

• Seen from this continent, the recent crisis in European sovereign debt markets may be interpreted as a failure of the euro. But in Europe, the crisis is viewed differently. The problems we face today are the result of a flawed implementation of a fundamentally good idea. The bumpy ride of Economic and Monetary Union is largely the fault of the driver, not the vehicle. He has to learn from his mistakes and get some more practice – then he’ll be a better driver. As for the vehicle, it needs better brakes, for even the best of drivers can occasionally make mistakes.

Full speech