Jean-Claude Trichet: Structural reforms in Europe Speech by Mr Jean-Claude Trichet, President of the European Central Bank, at the OECD Forum, Paris, 22 May 2006. *  *  *  It’s a pleasure for me to be here at the OECD Forum to share with you my views on structural reforms in Europe. I am particularly honoured to take part in this Forum given the leading role played by the OECD in shaping global discussions on economic, financial and, especially, structural issues, which are the topic of my intervention today. I wish also to pay my tribute to the outgoing Secretary General Donald Johnston for his outstanding leadership and, if he permits me to say that, for his deep friendship. Let me also welcome the new Secretary General Angel Gurria for whom I have esteem and confidence since 25 years! Economic performance of the euro area I would like first to start with a brief assessment of the euro area’s economic performance by recalling a few facts. Over the last years the euro area witnessed a slight improvement in the utilisation of labour, which increased on average by 0.2% per year between 2000 and 2004. 1 This mainly reflects the rise in the euro area employment rate from 61.5% in 2000 to 63.6% in 2005 2 which corresponds to the creation of more than 11 millions new jobs over the same period and to a decline in the aggregate unemployment rate from 10.5% to 8.6%.
It is thus due to the instruments available on the market that the largest part of our foreign currency investments is in euros (55%) and in US dollars (25%). The remainder of our investments is composed of yen (10%), Canadian dollars (4%), pounds sterling (3%) and other currencies (3%). Finally, taking a general and somewhat longer-term view, the following point should be noted. The SNB’s currency reserves are made up of foreign currency investments and gold. In a risk-averse environment, losses tend to occur on foreign currency investments and profits on gold, while in a risk-friendly environment the opposite is true. Consequently, diversification of a portfolio to include gold and foreign currency helps to stabilise earnings over an entire risk cycle. BIS central bankers’ speeches  3