How confident are you about the state of the political European landscape now? Is there more of a momentum for reforms now? Constâncio: Crises are always bad for the social and political mood, and recoveries are always good. And so there is a bit of a recovery, which is becoming stronger, and that, of course, has had its effects, in the mood of societies, of public opinion, and also in the political sphere. That’s what I think the President indicated, and indeed, there were fears, especially from outsiders, that some of the political developments in some European countries would go in the direction of creating some doubts, which were dispelled. So that’s what he refers to. But throughout all this period there is one thing that is important to recall: if you go to the Eurobarometer that is the result of surveys in all Member States, you see throughout all these years, all these years, that the support for the euro – being in favour of the single currency, the euro – has been stable at around 70% of Europeans in the euro area countries; and that in all countries there was a majority supporting the euro. A majority in all countries. The numbers are different according to the different countries, but in all they are the majority. So this has been the support that the project has benefited from, and the present recovery has indeed reinforced those views. But we are talking about reforms as well.
The President, in the speech, precisely pointed out that looking to unemployment as an indicator of this slack in the economy, the unemployment rate now is 9.3%, according to the normal international standard of measuring unemployment; but if we adopt, as in the US, a broader concept of unemployment – which in the US they call U6 – then unemployment in the euro area is at 18%, where it is at 9% in the case of the US. Which would imply that the slack is then bigger than we could judge some time ago. That being the case, it justifies fully what the President said at the end of his speech: that we need persistence. If we want to bring inflation to our target of below but close to 2%, then we have to persist in the type of monetary policy that we have been adopting. But looking at the market reaction, the market took the speech quite hawkish, meaning concentrating on the optimistic comments about inflation, the economy, perhaps also the political tailwind. So is the market right to read your communication style as more hawkish than before? Constâncio: It’s always very difficult to interpret the reaction of markets. I will not try to say 1/3  BIS central bankers' speeches  rationalise or explain; the reaction of the market was what it was.