encourage investment. lastly, the composition of the fiscal adjustment is of the utmost importance. better targeted spending, notably on investment, the public sector portion of which fell during the crisis ( from 7. 1 % of public spending in the euro area in 2007 to 5. 5 % in 2014 ), will create more growth and more jobs. 4. strengthen the euro area ’ s institutional foundations in countries that share a single currency, economic policies are a point of common interest. this is in the economic interest of the member states and is also a legal obligation : the treaty on the functioning of the european union is clear on this point. this is a necessary condition if we want to fully benefit from monetary union and, at the same time, remedy the structural, fiscal and financial weaknesses within the euro area : the crisis showed us that local fragilities quickly become everyone ’ s problem. on the flip side, our monetary policy and banking union have shown the power of joint action. it is a lesson we must not forget. forecast spring 2015, european commission ; and “ where are we headed? perspectives on potential output ”, in world economic outlook, international monetary fund, 2015. christian noyer, “ introductory letter to the banque de france ’ s annual report ”, 4 may 2015. anderson, d., barkbu, b., lusiyan, l. and muir, d., “ assessing the gains from structural reforms for jobs and growth ”, in schindler, m., berger, h., bakker, b. and spilimbergo, a. ( eds ), jobs and growth : supporting the european recovery, international monetary fund, 2014. bis central bankers ’ speeches the crisis has already led to major progress on institutional matters, such as the establishment of the european stability mechanism or the banking union, with a single supervisory mechanism and a single resolution fund based on common rules. these two achievements have played a key role in strengthening monetary union during the crisis. the establishment of the banking union is also an example of an institutional process allowing the sharing of risk, which followed several steps. first : political agreement on european legislation laying down common rules and putting an end to bank sector abuses. i am thinking specifically of strengthening capital at systemically important banks, bail - in rules that will eventually rid the banking sector of the practice of “ privatising profits and socialising losses ”, and – i hope – application at european level of the principle of bank structural

as micro - economic weaknesses and imbalances – in the latter case i am thinking specifically about national banking systems – and recommend appropriate policies to achieve internal stability and external viability. thus, it could serve as a prominent tool for preventing externalities and international crises. of course national authorities have to be prepared to adopt corrective policies in a timely manner – if called for. the future of official international organizations to what extent the efforts of international organizations to produce stability have been successful in the past is open to debate. unfortunately, financial crises have occurred in recent years in several countries. all elements – the setting of codes, rules and procedures, their implementation and monitoring – have to be respected to safeguard international economic and financial stability. some initiatives are already under way in this respect. in general, it seems crucial that the international organizations concentrate – not least under conditions of scarce resources – on their core mandates. as concerns the imf, the surveillance function must play a dominant role on the basis of professional diagnosis and frank and open discussion of therapy. not completely new though is the problem of non - complying countries that refuse corrective policies suggested by the imf and supported by its membership. at some point in time, when non - compliance heightens the risk of a crisis, the imf must go beyond confidential channels of communication with the respective country. while we do not want the imf to become a kind of rating agency, the imf should under appropriate circumstances issue data information to encourage the respective authorities to correct some “ dangerous policies ”. another element of the fund ’ s preventive role is the design and monitoring of data publication standards like the sdds to enhance transparency of the national economic situation and policies as a means to facilitate solid judgements by markets participants that allocate financial flows. i mention the financing role of the imf at this late stage, since it generally comes into play when preventive efforts of all players have not succeeded. it is certainly a more visible and glamorous role, especially in crises situations, than the day to day business of surveillance, but it is a sign of failure of the preventive role. a rising need for imf financing reflects a poor grade for the fund ’ s surveillance efforts. generally speaking, the more successful the surveillance, the less imf financing is required. of course, conditionality under fund supported programs should be subject to the same test to demonstrate its effectiveness. this implies that successful work of the imf should be reflected in