The structural reforms undertaken in Spain over the course of recent years have helped make the economy more robust and adaptable to adverse situations. This is particularly desirable in an increasingly changeable and uncertain global environment. One of the key elements providing greater resilience and flexibility is the labour-market reform, which gave businesses more internal flexibility. This flexibility provides additional tools with which to adjust labour costs in the event of a short downturn instead of the traditional mechanism whereby workers – mainly those on temporary contracts – are laid off. Other reforms have also encouraged better allocation of funds by the financial system to new, higher potential, investment projects. These include financial system reform and insolvency law reform, in particular. Despite these changes, the Spanish economy still faces major structural challenges that limit its potential growth. I would like to highlight three of these challenges: population ageing, the high unemployment rate, and low productivity growth. Population ageing has consequences for the effectiveness of traditional macroeconomic policies, the sustainability of the public finances, and productivity growth. Addressing this challenge requires a multidisciplinary policy that creates incentives for older workers to remain in the labour force, revises migration policy to try to adapt it to the needs of the labour market, and boosts the birth rate to bring it closer to rates in other European countries by improving the work-life balance and enhancing job stability in the childbearing years. Meanwhile, the high unemployment rate remains a serious drag on growth and welfare.

It stated that it would enforce this minimum rate with the utmost determination and was prepared to buy foreign currency in unlimited quantities for this purpose. This policy is still in force, without any restriction. The impact on the Swiss economy of the deterioration in the international environment as well as the exchange rate movements in July and August had been steadily increasing. Economic activity weakened significantly over the course of 2011 and the pressure on profit margins intensified further in many industries. However, in the past few months there have been growing signs that the economic situation in Switzerland has stabilised as a result of the minimum exchange rate. Thus the minimum exchange rate of CHF 1.20 per euro has, to date, proved to be effective. It has reduced the very substantial overvaluation of the Swiss franc. Moreover, the extreme exchange rate fluctuations which had been experienced previously have been lessened. This has given business leaders a better basis for planning, thereby clearly limiting the damage inflicted by the appreciation of the Swiss franc on the real economy. However, apart from the exchange rate, future economic growth in our country will once again depend on developments in the international economy. That is why I will now present to you our assessment of the international economic outlook. Economic outlook and outlook for price stability The latest economic statistics suggest that the international economic recovery will continue, although growth rates are likely to be on the low side by comparison with typical recovery phases.