Klaas Knot: The advanced countries - economic challenges for the medium term

Opening remarks by Mr Klaas Knot, President of the Netherlands Bank, at the panel "The Advanced Countries: Economic Challenges for the Medium Term" during the G30 34th International Banking Seminar, Washington DC, 20 October 2019.

The views expressed in this speech are those of the speaker and not the view of the BIS.

On 20 October 2019, one of the panel sessions at the International Banking Seminar was called 'The advanced countries; Economic Challenges for the Medium Term'. Klaas Knot was asked to deliver a short opening statement. In it, Mr Knot focussed on the challenges the Economic and Monetary Union faces over the medium term, concluding with three concrete recommendations.

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I would like to start by thanking the organizers of the Group of Thirty for the chance to participate in this panel. In my introduction, I will focus on the challenges the Economic and Monetary Union faces over the medium term.

Let me start by saying that the concept of the 'medium term' is an intriguing one. From a political perspective the medium term is a place where one kicks the proverbial can to. From a monetary policy perspective, on the other hand, problems in the medium term would typically be cause for immediate action. This asymmetry in policy reactions might be at the core of the institutional frictions facing the Economic and Monetary Union since the global financial crisis.

The twenty years since the formation of the Economic and Monetary Union can be divided into two very different periods. The first decade was characterized by stable inflation and economic growth.