in turn, starting with the engine overhaul, that is, with structural reforms. 2. emu ’ s growth engine the european commission estimated in 20131 that the euro - area medium - term growth prospects – in other words, the growth rate in the next ten years without any additional reforms – is only 1 %. these figures would hardly earn you a place in the heart of a young top trumps enthusiast. european commission ( 2013 ), “ the euro area ’ s growth prospects over the coming decade ”, quarterly report on the euro area 12 ( 4 ). bis central bankers ’ speeches what ’ s more, one might argue that a lot of potential in terms of structural reform has already been unlocked, especially in the countries worst hit by the crisis. and indeed, much has been done to correct the macroeconomic imbalances that are at the root of the struggle the euro area is facing. the divergence between prices and wages on the one hand and productivity on the other was the driving factor behind the current account deficits. these deficits had to be financed externally and gave rise to the precarious levels of public and private debt. prior to the crisis, current account deficits in spain stood at 9½ %, in portugal at 12 % and in greece at a remarkable 14½ %. when markets refused to continue financing the deficits at longer - term bearable interest rates, the gap had to be closed. the financial support provided under the rescue mechanisms and our common monetary policy have smoothed the adjustments – without these measures, the adjustments would have been far more abrupt. still, adjustment had to happen, and the reforms undertaken so far have facilitated these adjustments. wage negotiations, for example, have been decentralised and wage indexation has been abolished or reduced – spain is a case in point. this makes it possible for wages to take the specific situation of each firm into account and to make firms more flexible in their response to economic shocks. as a consequence, unit labour costs have gone down by 18 % in ireland, 5 % in spain, 4 % in greece, and 1½ % in portugal. prices and wages have been brought more into line with productivity. this will allow all crisis countries except greece and cyprus to switch external deficits into surpluses in 2015. as a result of the ongoing restoration of competitiveness, the euro area has now been placed on a sounder footing. but while competitiveness is necessary for growth, it is in itself not enough.

of up to usd 20 billion, which in fact does not imply the use of international reserves. the latter has contributed to the significant appreciation shown by the peso in recent weeks. it is important to note that this approach is fully consistent with a flexible exchange rate regime that plays a key role as a shock absorber, which operates under the premise that the level of the equilibrium real rate must be determined by market forces, and where the value of the domestic currency is supported mainly by economic fundamentals. against the background of an increase in public debt as a share of gdp, a major fiscal adjustment has been announced for 2017 and subsequent years. indeed, the strict implementation of these measures should allow integrated by representatives of the banco de mexico and the secretaria de hacienda y credito publico. more flexibility in the conduct of monetary policy and, therefore, a more efficient economic adjustment to an adverse external environment. the role of monetary policy in preserving or restoring financial stability is a subject of much debate. macroeconomic stability is a necessary although insufficient condition for financial stability, and of course monetary policy is a key element in this regard. but the role of monetary policy beyond this is not always clear. in my opinion, although there may be instances where monetary policy actions can be usefully steered towards financial stability, frequently its effects on the broader economy beyond the financial sector will make it a blunt and inefficient tool. for this reason, it will often be better to rely on the implementation, with the involvement of all the corresponding authorities, of macroprudential policy measures specifically tailored to fend off risks to the stability of the financial system, and which in general do not have consequences beyond their intended purpose. it should be noted, on the other hand, that financial stability is a complex objective that will many times require coordinated actions in several fronts, including, in addition to macroprudential instruments, fiscal, monetary and microprudential policy tools. the financial system stability council ( cesf ), created in mexico in mid - 2010, and which encompasses all the authorities in charge of macroeconomic policy, and financial regulation and supervision, represents an effort in this direction naturally, the pernicious implications of volatile international capital flows on macroeconomic and financial stability are hard to avoid. in this context, the possible implementation of measures to “ manage ” the flows of capital to and from an economy has been gaining adherents. however, the distortions introduced by capital controls are likely to