- hit countries with open arms. the result would be a win - win situation. people from the crisis - hit countries would find jobs here, and may possibly one day return to their home countries with the knowledge and experience they have acquired here. and employers in germany would find the right employees for the posts they want to fill. bis central bankers ’ speeches but, in germany as elsewhere, there is more to do than that : we in germany need to continue to tackle the ongoing challenges of globalisation, and we also need to do more to deal with the challenges of demographic change. we, like others, cannot sit idly by. therefore, this is no time for resting on our laurels. we also have to continue to think about how we can ensure that our enterprises can find sufficient numbers of skilled, motivated employees, given that germany ’ s potential labour force is steadily shrinking for demographic reasons. first, then, we should try to increase labour force participation amongst women and older people … … and, second, we should make it easier for skilled workers to migrate to germany. however, it is not just a matter of slowing the shrinkage of the labour force – what are also required are measures to enhance labour productivity. here i am thinking, in particular, of expenditure on education. but it is less about the level of spending on education, and more about the targeted use of resources, particularly in the provision of pre - school support. another important challenge is in integrating the low - skilled and the long - term unemployed into the world of work. looking ahead, there will also have to be a discussion about how the german economy can be better equipped to deal with ongoing structural shifts. if we are to hold our own in the international competitive environment, we will need to enable workers from shrinking industries to migrate as smoothly as possible to new growth industries. that requires a labour market which is not just flexible on the edges. now i have looked at the need for reform in the labour market, i must, of course, turn to the issue of public finances. 3. the need for reform in public finances as a result of the financial crisis and the ensuing economic collapse, the budget deficits of many euro - area countries expanded significantly. in 2010, the deficit was above the threshold of 3 % of gross domestic product in 14 out of the 17 countries. indeed, in ireland action to rescue the domestic banking system pushed the deficit up to just under 31 % of gdp in 2010. the con

feasible. that is also what is stated in the report by baron lamfalussy. as a matter of priority, the regulatory gaps should be filled in and the process of harmonisation in the stock exchange and securities sector should be accelerated. one example is the “ european passport ” for issuers. the forum of the european securities commissions ( fesco ) will be presenting a proposal on this shortly. at present, the creation of uniform regulations, combined with an intensification of cross - border cooperation in committees represents a better course of action than a “ big bang ”. centralised stock exchange and securities supervision would scarcely be able to function without a european regulatory framework. effective stock exchange supervision depends on being particularly close to the markets. national bodies possess such market proximity in a more or less natural way. ii the appropriateness of the present supervisory structures in europe is being studied by banking supervisors, too. the report commissioned by the ecofin council, known as the henk brouwer report, has confirmed that the existing structure of european banking supervision is - without any reservations - doing its job properly. even so, the report states that practical cooperation among those involved in banking supervision still has to be further optimised. among other things, that finding reflects a development that attracts little attention from the general public : banking supervisors have been continuously adapting themselves to the trend towards cross - border activities. they have been pursuing their own internationalisation strategy. the present system of banking supervision in europe essentially rests on three pillars : • harmonisation of the regulations ; • national regulatory competence ; and • bilateral and multilateral cooperation. bilateral cooperation is based on memoranda of understanding between the supervisory bodies. added to this, at the multilateral level there is the banking supervision committee at the ecb. this committee is filled by senior representatives of the supervisory authorities and central banks of all the 15 eu member states and facilitates the exchange of information and cooperation both among the national supervisors themselves and with the escb. one main area of the bsc ’ s work consists of macro - prudential studies on the stability of the eu banking systems. this includes, for example, the study on “ asset price inflation and banking stability ”, which has also been published. the committee thereby makes a major contribution to crisis prevention. in the converging european financial market, systemic crises are becoming an increasingly important issue. central banks, in particular, have a special interest in safeguarding the stability of the financial system. the prevention