requires now stronger central deciding bodies. to understand the great difficulty in addressing this issue, we have only to think about the analogy we could establish with the political trilemma of the world economy recently enunciated by dani rodrik : 13 “ we cannot simultaneously pursue democracy, national determination and economic globalization ” i will not enter into such complications. i will recall, however, that in this context, we should never forget that europe is not a nation or a state. political life and legitimacy continues to occur mostly at the level of nation - states. this implies that to foster legitimacy we have to act on the two levels the european and the national by giving for instance, the european parliament a stronger euro area dimension and engaging national parliaments more in euro area discussions. i wanted to highlight the importance of these issues but as i said i will not dwell upon them further. conclusion let me then conclude. the euro area was designed in the 1990s and we should not be too critical of the fact that its architecture was influenced by the prevailing economic theory. however, we now have more than a decade of practical experience of sharing a single currency in europe. it is unacceptable if we do not learn the lessons of that experience. the most important lesson is that, to maximise its benefits, the single currency needs strong common institutions. strong institutions to supervise and stabilise the single financial market. strong institutions to guide fiscal policies and preserve budgetary sovereignty. strong institutions to guarantee competitiveness and encourage sustainable growth. and strong institutions to engage citizens more closely in the european project. in this effort the european and national dimensions of legitimacy must be balanced. nevertheless, we must also recall that nations are a construct of man, not a natural reality, meaning that our consciousness and our knowledge are socially constituted. a form of civic community among strangers was somehow created to shape several european nation - states only as late as the xix century. that explains why we belong to two societies, our own and the european one as the essential cultural background for our universal - aspiring values. in this sense, europe is a memory, a key to understanding our own past. however, the eu, and even more so the ea, are political projects and what we want now is to pursue the project of completing and deepening the integration of european nations in a unique community of destiny that is neither a nation nor a state. it is a powerful vision of preserving and defending national identities and interests in a globalized and very challenging world.

years before entry into the euro. to support this process, it is urgent to improve euro area growth rates, which are projected to remain low for a number of years. this can be done by unlocking the many rigidities that still exist in euro area product and labour markets. this process of debt stabilisation is already well underway. the imf projects that the euro area will be almost in primary balance this year, with an average debt level just over 90 % of gdp. in terms of fiscal consolidation, this puts the euro area significantly ahead of some other advanced economies. bis central bankers ’ speeches how to deal with intra - euro area competitiveness imbalances? ensuring debt sustainability is to a large degree linked to the second question of today ’ s panel : how to deal with intra - euro area competitiveness imbalances? to some extent, this question is already answered. rebalancing is happening. large competitiveness adjustments are taking place in the so - called periphery. the countries under full eu - imf programmes have seen unit labour costs improve by around 10 % since 2008, relative to the euro area average. current account deficits are on average 8 percentage points of gdp lower than they were then. but to ensure that this competitiveness improvement is structural rather than cyclical, three further elements are crucial. first, continued and determined reform. and this ultimately has to go beyond economic policies and into fundamental issues of governance, like public administration, judiciary and education. second, the completion of europe ’ s single market. it does not serve citizens to protect local monopolies that lead to high prices and low quality. europe has some of the world ’ s most sophisticated and innovative companies, and they should be operating on a european scale. third, stronger economic governance. we have already made some progress here with a new procedure to monitor and correct euro - area imbalances. but we also need to find better ways to incentivise continued structural reform, including through the use of common funds. all these measures are of course relevant for the country most in the media spotlight, greece. a lot has been done by the greek authorities in last two years. the primary deficit has been reduced by more than 8 pp from end - 2009 to end - 2011. labour market reforms are beginning to show positive results. but a lot still remains to be done. the greek authorities have to demonstrate that they can continue to stick to their commitments. we are seeing encouraging signs that the