But it also carries a political weight: when Mario Draghi speaks at the G20, the whole world listens to what Europe has to say. 2. Yet, despite the success of monetary union, Europe’s economy is now confronted with a new trilemma. Weaknesses have materialised. Addressing people’s expectations requires identifying the flaws of our Union in an open and honest manner. Regarding growth, we must distinguish between the snapshot of the present and the full movie that we have lived through. The present snapshot is positive: euro area growth is accelerating, and is now up to speed with the United States or the United Kingdom. However, this is not sufficient to make up the cumulative shortfall of past years: the full movie until today is that since 2011, the cumulated EU growth trajectory is 7.5 GDP points below the US’. Even when measured per capita, this underperformance amounts to 5 percentage points. And we see the same contrast regarding convergence between countries. The present snapshot, which is positive, shows that intra-area divergences have been significantly reduced and are at their lowest level since 1999. But the full movie up to today 3/8  BIS central bankers' speeches  shows rather wider disparities in income per capita, as a result of the 2009–2012 crises. To make matters worse, all too often, Member States tend to act in isolation, not taking into account the externalities and the impact that their policies have on others.
Global economic developments are marked by the turnaround in the US economy. The US accounts for about 20 per cent of the world economy. The turnaround in the world's largest economy will have an impact, also in Europe. The question is how severe the turnaround will be, and how strong the impact will be on European economies. 2  BIS Review 19/2001  The US economy expanded by 5 per cent last year. The upturn in the US has spanned almost 10 years - the longest cyclical upturn ever. The chart shows OECD forecasts and actual developments over the past five years. As we can see, growth has been stronger then expected every year in this period. At the same time, inflation was moderate and unemployment declined. Many observers attribute the prolonged period of strong growth to the new economy, which features three main aspects: •  The labour market had become more flexible. While earlier experience implied an acceleration in the rate of increase in wages and prices at an unemployment rate of six per cent, unemployment fell to four per cent without triggering higher inflation. •  Productivity growth increased in both the IT sector and in other industries. The forecasts for the annual growth potential of the US economy were revised up substantially to around 4 per cent. •  Equity prices for technology stocks advanced sharply, with more than a sixfold increase in the Nasdaq index from the beginning of 1995 to the peak in March 2000.