Jean-Claude Trichet: The changing role of communication Introductory remarks by Mr Jean-Claude Trichet, President of the European Central Bank, at a dinner with members of the “Internationaler Club Frankfurter Wirtschaftsjournalisten”, Frankfurt am Main, 15 December 2008. *  *  *  Ladies and gentlemen, A very warm welcome to all of you and thank you very much for your invitation to this club evening. I am happy to see many familiar faces in the audience tonight. Communication is a very important issue for all times. Being here in Frankfurt I am thinking of the very profound remark by Goethe: “Niemand würde in Gesellschaften viel sprechen, wenn er sich bewuβt wäre, wie oft er die anderen missversteht“. Nevertheless let me be bold enough to share with you some thoughts on communication and central banks. Communication is a key element for central banks to enhance the effectiveness, predictability and credibility of their monetary policy decisions. It becomes even more important in difficult times, when the economic outlook darkens and confidence weakens. It seems to me that central banks have improved their communication significantly in good times – and also in bad times – while some years ago communication was almost seen as a breach of their professional code. Why this change? Why did central banks decide to become transparent? Prior to the 1990s, central banks were very much working on the assumption that monetary policy effectiveness is greatest when the central bank systematically surprises the markets.
Ten years ago – on 1 January 1999 – it was introduced in the then 11 countries of the euro area. Ten years is a short time in history. But it represents a good opportunity to talk about successes and challenges – the subject of my address tonight. I wish to consider this theme by asking three questions: 1. How successful is the euro? 2. What is the euro’s role in the current financial market turbulence? 3. What challenges lie ahead for the single currency? I intend to refer to a series of current issues relating to the global financial market turbulence and economic developments in the euro area. The first question: How successful is the euro? The euro is a stable currency and is an important contribution to the completion of the Europe’s single market. That’s why it is a success. After all, it helps to secure prosperity in the participating states. Stability of the euro Let me first of all consider the theme of stability. Before the euro was set up there were reservations about the stability of the future single currency, including in Germany. The first ten years have shown that these fears were unfounded. The euro is just as stable as its most stable predecessors, which were merged into it. That applies of course also to the Deutsche Mark. “The euro will be as strong as the Mark”, it was said. That promise has been kept.