The connotation that people attach to the term “Nullzins” will likely be different from, say, “geldpolitischer Impuls” – although both terms in essence describe the same thing. Worse, monetary policy can quickly become overburdened if national fiscal and economic policies fail to internalise the effects they have on the common currency. The temptation to freeride is always present in a monetary union. It is easy to see that if fiscal policy is loosened during an expansion, or tightened during a recession, the burden on the central bank to stabilise the economy increases mechanically. Even today, euro area growth still relies too much on monetary policy support. According to ECB staff estimates, the contribution of our easing measures to annual euro area GDP growth was half a percentage point in 2017 and will still be around one-third of a percentage point in 2018. And monetary policy can do little to lift the long-term growth rate of our region. All of this means that our currency union needs further reform – both at Member State and euro area level. I believe there is wide agreement on this. Where we still lack agreement, however, is on how these reforms should look in practice. I have described elsewhere the requirements of reform from the perspective of the single monetary policy. 1 As the central bank of the euro area, we have a stake in the success of the current discussion.
For example, ASEAN has concluded Free Trade Agreements (FTAs) with Australia, New Zealand, China, Korea, Japan, and India. The ASEAN-China FTA alone covers over 1.9 billion consumers and an estimated trade volume of $ trillion. As Asia grows and comes together economically, global companies that aim to have a share of the pie will have to develop strategies and production models that are customised for Asia. Singapore exists at the confluence of these emerging trade routes within Asia and as well as between Asia and other regions. We have positioned ourselves as Global-Asia hub to take advantage of Asia’s growth. Our strategic location and affinity with other Asian countries made us the location of choice for companies from the West to grow in Asia. In 2011, IBM Services set up an Integration hub here. GlaxoSmithKline too has set up their Emerging Markets & Asia Pacific HQ here to serve the Asian market. At the same time, Asian companies expanding globally often opt for Singapore as their international base. Tata Communications from India has its HQ in Singapore, as do many Chinese companies. To aid these efforts, Singapore has initiatives to attract and develop talent that can thrive globally. For example, in 2010 we set up the Human Capital Leadership Institute to bring talent together to interact with one another and to prepare for the future. Urbanisation and sustainability Second, sustainability challenges will loom larger as the growth of the global economy puts more stress on the environment.