evidence of this relationship for euro area periphery countries. 10 studies by the oecd confirm that a non - negligible percentage of firms in some eu countries can be classified as ” zombie firms ”. 11 for instance, in 2013, 28 % of capital resources in greece, 19 % in italy and 16 % in spain were sunk in firms that were unable to cover their cost of capital. 3 / 7 bis central bankers'speeches economists fabiano schivardi, enrico sette and guido tabellini have shown how the health of the banking system influences capital allocation. 12 they estimate that credit misallocation in italy reduced annual gdp growth by between 0. 2 and 0. 35 percentage point in the 2008 to 2013 period. what can be done to improve capital allocation? research suggests that effective restructuring and resolution regimes incentivise banks to grant credit prudently and can therefore improve economic growth. 13 progress has been made with regard to the reduction of non - performing loans on the books of euro area banks. but more needs to be done to resolve this issue as quickly as possible. in countries with low - npl banking systems, it would also help to alleviate concerns about the risks which might have to be shouldered when moving to a european deposit insurance scheme. the main takeaway from session i seems to be that levers such as competition policies have to be pulled in order to improve allocative efficiency. this resonates well with the message which the governing council has been stressing for years now : structural policies are key to shifting the economy towards a higher growth path. however, the findings on mark - ups may also have important implications for inflation. here, it may be convenient to distinguish between longer - term and cyclical aspects. if mark - ups have indeed risen in the united states over a long period of time, they should have produced upward pressure on prices, all else equal. along these lines, jan eeckhout may suggest later that the us inflation rate was lifted by about 1 percentage point per year from 1980 to 2014, as the average mark - up rose. 14 thus, absent this effect, inflation would have even been markedly lower in recent years than it actually was. this would render the phenomenon of subdued inflation in the face of a tighter us labour market all the more puzzling. on the other hand, the bundesbank study i just mentioned finds evidence of a procyclical behaviour of mark - ups in european countries. especially during

reweighted economic factors and developments as well as risks, and continue to weight these factors differently than the majority of ecb governing council members. you will no doubt know that the ecb staff project that the inflation rate will be zero this year, rising to 1. 5 % and 1. 8 % over the next two years. they also forecast that growth will climb from 1. 5 % this year to 1. 9 % in 2016 and 2. 1 % in 2017. this assessment is, in part, also a reflection of expectations placed in the transmission of monetary policy decisions. but my reading of the latest data and the projection is that they are more an endorsement of a restrained monetary policy response. as i see it, the projected path of inflation clearly illustrates that the spell of low or even negative inflation rates is only a temporal phenomenon. the effect of the lower oil price plays a particularly important role in this regard, and it also significantly eases the financial strain for enterprises and households. this in turn stimulates their consumption and investment activity, contributing to the expected economic recovery. and it also reduces the threat of a prolonged phase of low inflation rates possibly sparking a self - reinforcing downward spiral of fallig prices, wages, production and employment. incidentally, i see no signs of second round effects. the collective labour agreement in the metal - working industry is largely in line with our expectation of negotiated wage rates in bis central bankers ’ speeches germany climbing by roughly 3 % this year. and for the other euro - area countries, too, there is nothing at the moment to suggest that the european commission ’ s projection of a 1. 3 % increase in euro - area employee compensation this year is untenable. i am not denying that the announcement of bond purchases has further reduced the likelihood of deflation. that, at least, is what the data on inflation options seem to suggest. but the likelihood of deflation was rather remote even before the measures were announced. that ’ s why, on the whole, i don ’ t think it would have been necessary to further ease monetary policy by rolling out the broadly based government bond purchase programme. all the more so, given that the purchase of sovereign bonds in the euro area harbours specific risks, making it a monetary policy instrument unlike any other. but at least it is worth noting that the decision to largely rule out risk - sharing as part of the bond purchase programme counteracts the direct threat of sovereign credit risks being mutual