Unsecured interbank rates play an important role as benchmark for interest rates paid on loans to households and firms in the euro area. Thus high spreads between the ECB policy rate and money market rates increased financing costs of the broad economy above the level desired by the ECB. In other words, the pass-through of policy rates to the economy was impaired.
Second, based on how the euro area has coped so far in its increasingly globalised environment, I would then like to draw your attention to structural reforms that I consider decisive for the euro area to remain competitive and to keep pace with its main competitors worldwide.