staff macroeconomic projections indicate continued progress in reducing fiscal imbalances in the euro area. the aggregate euro area general government deficit is expected to have declined to 3. 2 % of gdp in 2013 and is projected to bis central bankers ’ speeches be reduced further to 2. 7 % of gdp this year. general government debt is projected to peak at 93. 5 % of gdp in 2014, before declining slightly in 2015. looking ahead, euro area countries should not unravel past consolidation efforts and should put high government debt ratios on a downward trajectory over the medium term. fiscal strategies should be in line with the stability and growth pact and should ensure a growth - friendly composition of consolidation which combines improving the quality and efficiency of public services with minimising distortionary effects of taxation. national authorities should also continue with the decisive implementation of structural reforms in all euro area countries. these reforms should aim, in particular, to make it easier to do business and to boost employment, thus enhancing the euro area ’ s growth potential and reducing unemployment in the euro area countries. to this end, the governing council welcomes the european commission ’ s communication of yesterday on the prevention and correction of macroeconomic imbalances and on the excessive deficit procedure. looking ahead, it is key that the macroeconomic surveillance framework in the euro area, which was significantly strengthened in the wake of the sovereign debt crisis, is implemented fully and in a consistent manner. we are now at your disposal for questions. bis central bankers ’ speeches

structural shortfalls that may have hindered economic development in the past, and could become even more binding in the future. the last pillar is to lay out a clearer long - term plan for strengthening and developing the economy, leveraging on its strength and the opportunities presented by the evolving landscape. the first pillar : maintaining stability distinguished guests, with an increasingly globalized economy and financial markets, the world is irreversibly and ever more interconnected. as a small member in the global community, we have no choice but to take this trend as given, and focus on fortifying the economy ’ s resilience against currents of uncertainties. the financial environment today continues to be shaped by the legacy of the global financial crisis. as the federal reserve continues to scale down its unconventional monetary policy and normalization of their policy rate looms, many emerging economies may experience sporadic fluctuations of capital flows and asset prices – be they in the bond, equity, or foreign exchange markets. so - called qe taper tantrum last year did bis central bankers ’ speeches prove disruptive for some members of the emerging markets club. that experience highlights the importance of maintaining sound macroeconomic fundamentals in order to foster the economy ’ s resilience against shocks of external kind. despite higher global interconnectedness, investors do differentiate at the margin. those countries with stronger macroeconomic stability both experienced less volatile capital outflows, and are less disrupted by them. this is not to say that financial market rationality can always be counted upon. global fund flows may also be subject to fads, speculation, and short - termism. left on its own, the resulting financial market volatility could prove damaging for overall macroeconomic stability. the policymakers have an important task of pre - empting such excessive and unjustified volatility. thailand has had its fair share of volatile capital flow episodes in recent years. the economy has however managed to withstand these tests quite well, a testimony to the economy ’ s resilience to external shocks. exchange rate flexibility, a lack of external imbalances, very low external debt, strong and flexible private sector all contributed to the success. as a backstop, the bank of thailand also has a comprehensive policy to deal with potentially disruptive capital flows, with sequencing that makes up multiple lines of defense. having a credible policy response strategy confers an additional benefit of discouraging speculative flows in the first place. equipped with a wide range of policy