vital. and i must say that the measures announced so far by most of these tiers of government do little to respond to the radical reduction in unproductive public spending that our economy needs. as i said earlier, the recently approved fiscal adjustment measures were urgent, since they were vital to curb a situation of extremely high instability that might have had disastrous consequences. but there are other measures which, without having the same degree of urgency, are nonetheless more important, since their goal is to ensure medium - and long - term budgetary stability. clearly, i am referring to the measures to reform our pension system. at an earlier date, the government tabled some proposals in the updated stability programme and, on this basis, the toledo pact commission will set about work in the coming weeks. i do not wish to go into details here on the possible avenues of reform. but clearly, a combination of changes that were to raise the legal retirement age, the minimum number of years necessary to qualify for pension benefits and the period over which pensions are calculated would be optimal for ensuring the system ’ s viability. pension reform will not entail a significant improvement in the budget deficit figures in the very short term, but it will exert a powerful influence on the recovery of confidence in spain ’ s economy and in its public sector ’ s solvency, and that will translate into better financing conditions and sounder growth prospects. therefore, i can but urge that discussions under the aegis of the toledo pact take place as promptly as possible, with the widest political consensus, as i believe this may be a key factor for dispelling the uncertainty we have been facing in recent weeks. the fiscal consolidation programme and the measures adopted to reinforce the institutional arrangements of the monetary union are fundamental, but they do not suffice to return the spanish economy to a path of high growth, particularly following the strong adverse impact the recession has had on all the european countries ’ potential growth capacity. consequently, the other centrepiece of the response to the current emergency situation is to adopt a series of structural reforms conducive to the resumption of sustained growth in output and employment. these reforms, in turn, would contribute to progress in fiscal consolidation, as they would enhance the perception of the sustainability of public finances and would reduce the degree of sacrifice implicit in the necessary fiscal austerity that must be maintained in the coming years. there are several fields in which the spanish economy requires an overhaul of its structures, to

, following the lehman brothers ’ debacle in september 2008, a crisis broke that generated the most severe global economic contraction since the great depression. among other side - effects, this crisis obliged us to revise much of the previous consensus on monetary policy. it would however be unfair to ignore the fact that, in the specific monetary policy realm, discordant voices had some years back raised objections to the predominant model. in particular, the bank for international settlements had maintained since the early 2000s that, in specific circumstances, central bank conduct in the face of severe risks to financial stability would have to be pre - emptive and not only reactive. simply put, the damage wielded by a financial crisis might be so great that some price stability slippage in the present would be bis central bankers ’ speeches warranted in exchange for preventing a future, more serious deviation that might prove more difficult and costly to reverse. the bank for international settlements also asserted that the combination of a price stabilityoriented monetary policy and a merely micro - prudential supervisory policy did not ensure the stability of the financial system as a whole. in this connection a third tool was needed : a macro - prudential supervisory policy. while it is still too early to draw all the economic policy lessons arising from our experience of this crisis, i believe certain necessary changes can be discerned. among these, the need to pursue macro - prudential policies is one of the most evident implications. macro - prudential policy the crisis has demonstrated that the previous combination of monetary policy and microprudential policy is insufficient both for shoring up the stability of the financial system as a whole and for ensuring, in the event of crisis, that the impact on the real economy is limited. to achieve these goals a macro - prudential policy is also needed, and it must be equipped with new objectives and instruments. there is already some agreement on the need to have this new macro - prudential policy rest on two levels or dimensions. first, a cross - sectional dimension, focused on controlling the distribution of risks within the financial system at each point in time. this requires analysis of how institutions interact and what are the consequences of these interactions for the system as a whole. the aim should be to identify those interactions of most global systemic significance in order to subject them, logically, to more demanding soundness requirements. further, macro - prudential policy should also heed the time dimension, which analyses how