Some people here on the Continent who share this concern are inclined to argue that if a euro-participating country were to find itself in this situation - and given that it would have no macro-economic way out, for example, through exchange rate adjustment, or monetary relaxation, or fiscal stimulus beyond the limits of the Stability Pact - it would then have an overwhelming incentive to take the sort of supply-side measures which have proved so difficult to implement hitherto. I am not sure that you can necessarily rely upon that making life very much easier. But what I think this discussion points up, is the broader conclusion that if the euro is to go ahead in current conditions, as I assume that it will, then supply-side flexibility will become more crucially important that ever across the whole euro area. The Chancellor of the Exchequer announced last October that the United Kingdom would exercise its opt-out and not participate in the first wave of euro membership. That was a disappointment to some of our European partners. But it was a considerable relief to others, because UK participation from the outset would certainly have complicated the project - not least because of the substantial cyclical divergence between ourselves and the major countries on the Continent.
William C Dudley: Opening remarks for the Transatlantic Economic Interdependence and Policy Challenges Conference Opening remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York and Chairman of the Committee on the Global Financial System (CGFS), at the Transatlantic Economic Interdependence and Policy Challenges Conference, Federal Reserve Bank of New York, New York City, 22 April 2013. *  *  *  It is my pleasure to welcome you to today’s conference on transatlantic economic interdependence and policy challenges. We have a great program today with many distinguished speakers from academia, and the private and public sectors. In particular, I would highlight the keynote speech following lunch by Olli Rehn, the vice president of the European Commission. We live in a global economy with a global financial system, yet macroeconomic policy and regulation and supervision have a decidedly national orientation. This creates a challenge for all of us as we seek to balance our domestic needs against the benefits from having a harmonized and integrated global system. We can do better through international cooperation and coordination both on macro policy and on regulation and supervision, rather than trying to “go it alone.” As the two largest economies in the world, the United States and the European Union have a shared stake in the vitality of the global economy. Without growth in both our regions, the global economy will not prosper and we will not be able to satisfy the aspirations of our citizens.