The Spanish economy faces considerable challenges, which I have reviewed today. But the most pressing task undoubtedly lies in our labour market, the workings of which evidence singular traits compared with those of other countries. In times of crisis such as the present, these traits lead to the adjustment coming about essentially through job destruction and, even in boom times, the unemployment rate holds at an unjustifiably high level. To reduce such high unemployment and to rapidly generate jobs again, we must draw our institutional and legal framework closer to the models of the other developed countries, which allow for greater flexibility in the use of the labour factor with a greater degree of worker protection. In fact, within the euro, the key variable for the recovery of the Spanish economy is competitiveness. And without a far-reaching reform of these institutions, it will be very difficult for the Spanish economy to promptly attain a reasonable rate of sustained growth. On 10 June the government approved a Decree-Law providing for some improvement to the regulation of collective bargaining. Foreseeably, in its passage through Parliament, greater powers will be extended to workers and employers so that, in mutual agreement, they may decide what they believe is most suitable to enhance the productivity and competitiveness of their companies. The positive effects of this greater flexibility in the labour market would be reinforced if, moreover, measures were taken to increase competition in the markets for goods and services.

The restructuring and recapitalisation of the banking system has been accompanied by a significant drive to write down the balance sheets of Spanish deposit institutions which, since January 2008, have recognised and assumed asset impairment losses totalling € billion, equivalent to 9% of GDP. Lastly, I should like to stress the progress made in transparency and the significant role this tool has played. In particular, I should remind you that the Europe-wide coordinated stress tests conducted last year were subject in Spain to substantially higher coverage than in other countries. Indeed, the results of all savings banks and all listed commercial banks were published. Consequently, analysts and the public at large have all the information they need to evaluate and assess the situation of even the smallest Spanish institutions, something which cannot be done in other countries. Moreover, the Banco de España required all institutions to publish in detail their exposures to the most troubled assets, along with their volumes of wholesale funding and their liquidity situation. Lastly, another area in which the degree of transparency in Spain is comparatively greater is that relating to provisioning since, unlike standard practice in other countries, the methodologies for provision-measurement and provisioning requirements are public. Transparency is a most useful tool in financial system restructuring because it helps dispel doubts about the soundness of the Spanish banking sector, it enables public opinion to better understand the need to overhaul the savings banks sector, and it encourages managers and the attendant authorities to promptly undertake the necessary restructuring process.