I strongly believe that Europe’s economic weight rests on a tripod with no equivalent elsewhere in the world: our single market, our single currency and our shared social and environmental model. These are three assets, constituting our common identity, that we should build on. First, we in Europe share, thanks to our founding fathers and to Jacques Delorsi, a large single market. It removes most internal borders and regulatory obstacles to the free movement of goods, capital, services, and people in the European Union. It was no coincidence that access to the single market lay at the heart of the Brexit debate. Second, thanks to Helmut Kohl, François Mitterrand and many others, we have built a new and solid currency: the euro is a unique success, which is recognised worldwide and supported by a clear majority of euro area citizens (75%ii). Third, our common social model combines a lower level of inequality with a higher level of public services – let’s call it soziale Marktwirtschaft in German, and pay tribute to social democracy as well as to Christian Democrats. This model is more and more environmental,  Page 2 sur 14 and in this respect, Europe is clearly ahead. The world in this 21 st century, starting with its youth across the different continents, needs our European values. But do we have the power to project these values? Power is, in physics, the multiplication of weight by speed: we collectively have the former, but we lack the latter.
2  BIS Review 25/2006  We thus endeavour to attain the inflation target within a two-year time perspective, under normal circumstances. In certain cases, however, we may need to have even greater flexibility than the twoyear perspective allows. If the economy were to suffer very large supply shocks, for instance, in the form of structural changes that have a major effect on inflation, or if extreme situations such as war or natural disasters occur, the process of bringing inflation back to the target may need to take even longer to avoid excessive strain on the real economy. In this type of situation it would be even more important that there was confidence in the inflation target. However, flexibility must not be allowed to undermine the nominal anchor. If confidence were to fail, we would be forced to act more strongly and would not have the same possibility to consider the real economy. Thus, the objective of monetary policy is to maintain price stability. However, it is possible to give consideration to the development of the real economy. This does not mean having a target for growth or employment. Instead, this type of consideration is made possible by the way in which we have chosen to formulate the principles for attaining the inflation target. However, it assumes that there is sufficient confidence in the inflation-targeting policy.