contrary, it would undermine the long - term sustainability of fiscal positions and thereby weigh heavily on future growth. public finances in europe are already characterised by a large sustainability gap. future pension obligations in most countries are several times higher than the explicit debt burden revealed in the national accounts. by a very rough calculation, it would, for example, take germany three and a half years ’ output to honour its combined explicit and implicit debt. if future generations are to handle this sizeable burden - in germany as well as elsewhere - there is, first, no way of getting around a tough course of fiscal consolidation, which has to be augmented, second, by coherent policies to lift growth potential - as agreed on in the lisbon agenda. i appreciate the fact that, last year, germany directed its attention to structural reforms in the spirit of the lisbon agenda - even if this was driven more by the “ push ” of persistent economic stagnation than by the “ pull ” of the lisbon vision. under the federal government ’ s “ agenda 2010 ”, labour market flexibility has been improved in terms of the institutional framework, collective wage bargaining agreements and working hours. reforms in the social security systems have been enacted and will help to contain the implicit debt burden. among the remaining tasks, priority status should be given to untying the link between labour costs and social security and to raising the statutory retirement age. 5. concluding remark stability and growth go hand in hand. the lisbon agenda and the stability and growth pact complement each other in lifting the eu ’ s growth potential. both are needed and we should not say goodbye to either of them.

interest - heavy business models are particularly exposed to structural change. it is becoming increasingly important to tap new sources of income. 3. flight into risk isn ’ t the answer one simple escape route out of this malaise, it would appear, is a flight into risk – the search for yield is what i ’ m talking about here. my second theory, then, is this. banks and savings banks would be unwise to escape from structural change by fleeing into risk. and the longer the low - interest - rate environment persists, the greater the risk of institutions taking on excessive risk. after years of de - risking, we are now seeing the first signs in germany of a growing willingness to assume risk. prices in financial markets are leaping from one all - time high to the next – the only thing is, volatility is conspicuously low, despite the absence of a consistently robust economic and political backdrop. what ’ s the story for banks and savings banks? interest rate risk remains at an elevated level. in real estate business, there are budding signs that institutions are softening their credit standards. our low - interest - rate survey likewise points to an increase in risk propensity. one - third of small and medium - sized german credit institutions are planning to increase their business volume and risk taking. however, they do not wish to increase their capital to the same extent – in the medium term, that will erode their resilience. as we all know, one swallow does not make a summer. not just that, taking on more risk, in and 2 / 6 bis central bankers'speeches of itself, isn ’ t a problem, not yet at least – after all, managing risk is the raison d ’ etre of credit institutions. i am still at ease right now, because the stress tests we conducted as part of the low - interest - rate survey show that more than 95 % of banks would satisfy the broadly based capital requirements even in crisis scenarios. and yet caution is warranted on two counts. for one thing, banks and savings banks need to meticulously check whether they have tabs on the effects of the risks in their portfolios and can handle them when a crisis strikes. for another, taking on more risk – be it through portfolio shifts or extending the balance sheet – does nothing to resolve structural issues. at best, it will provide short - lived respite from earnings problems. 4. credit institutions need to be open - minded to