ANNUAL REPORT 2008 - Polymer Bank Notes of the World

for financial institutions, to facilitate the fundingof banks, to provide financial institutionswith additional capital resources, to allowfor the efficient recapitalisation of distressedbanks and to ensure sufficient flexibility in theimplementation of accounting rules. In addition,a financial crisis cell was established to facilitaterapid and effective action in a crisis situation.This cell brings together representatives of thecountry holding the EU presidency, the Presidentof the European Commission, the President ofthe ECB (in conjunction with other EU centralbanks), the President of the Eurogroup and thegovernments of the Member States.OTHER EU POLICIESThe ECB monitored developments in the fieldof EU climate change and energy policies, inview of their potential impact on macroeconomicdevelopments, price stability and fiscal positions.As regards energy policies, improving thefunctioning of the EU’s internal market forenergy can be expected to have a positive impacton energy price developments and to enhancethe predictability of energy supply. In bothpolicy fields, the focus during 2008 was onturning the EU’s ambitious commitments intolegislation. 2 The ECB also monitoreddevelopments in the Common AgriculturalPolicy (CAP), in particular as regards theirimpact on food prices. In response to the surgein food prices, the EU Council agreed on severalmeasures to improve food supply, such as thesale of public stocks, the suspension of theobligation for farmers to leave some of theirarable land uncultivated, an increase in milkquotas and the suspension of import duties forcereals. Following the launch of the “CAPHealth Check” by the Commission, the EUCouncil reached an agreement in November2008 to modernise and streamline the CAP andto remove remaining restrictions on farmers inresponse to the growing demand for food.2 According to the climate and energy legislative package, theEU should, by 2020, reduce greenhouse gas emissions by 20%compared with 1990 and increase the use of renewable energysources to 20% of overall EU energy consumption. Moreover, itshould increase energy efficiency by 20%.Box 12TEN YEARS OF EMU2008 marked the tenth anniversary of the ECB and of the Eurosystem and the ESCB. Thisanniversary provided an opportunity to review the first decade of EMU and to draw lessons fromthe experience gained during this period.In May 2008 the ECB published a special edition of the Monthly Bulletin, which gave anaccount of the Eurosystem’s work and achievements and looked at the challenges that theEurosystem and the euro area face as they enter their second decade. The first ten years of EMUhave demonstrated the ECB’s ability to fully live up to its Treaty mandate. In spite of a difficultexternal environment, characterised by a significant increase in commodity prices, price stabilityhas been broadly achieved. In the euro area, consumer prices rose, on average, at an annual rate of2.1% between 1999 and 2007, well below average annual consumer price inflation in the periodfrom 1990 to 1998, which amounted to 3%. Moreover, the ECB has succeeded in anchoringlonger-term inflation expectations at levels consistent with price stability. EMU has also fosteredemployment creation. Employment in the euro area rose by around 16 million persons between1999 and 2007, as compared with around 6 million persons in the period 1990-98.The European Commission published a communication in May, together with a report entitled“EMU@10: successes and challenges after 10 years of Economic and Monetary Union”, in174 ECBAnnual Report2008