productivity differences. at the same time, labour market policies should go hand in hand with structural reforms resulting in enhanced competition in goods and services markets. there are significant productivity gains to be had in europe by removing the considerable barriers to competition that still remain at the national and eu levels. further efforts should therefore be made to reduce firms ’ entry costs, such as the administrative burden on start - ups and – more generally – to reduce red tape. ensuring an institutional environment that encourages business creation and expansion should therefore be among our priorities, together with supporting innovation and the diffusion of technological progress. * * * let me stress, in conclusion, the importance of the ongoing process of structural reforms in the euro area. i see three main reasons for this process to be speeded up in the present european and global environment. first, we have to elevate the level of our growth potential. this calls, in particular, for a flexible economy capable of taking full advantage of scientific and technological developments and, particularly, of the it revolution as regards productivity. we are bound to catch up, progressively, with the levels of labour productivity growth reached by the most successful industrial economies, including the united states, since the mid 1990s. second, in a world of intensifying global trade, of very rapid development of emerging economies, and of the creation of a global financial system, we must make our economy more flexible so that it is capable of adapting rapidly to the major economic changes that globalisation is fostering. flexibility is the recipe for taking full advantage of the constellation of ricardian comparative advantages the world currently offers. third, a world of remarkable chances and unseen opportunities is also a world of risks. we must do all that we can to prevent those risks from materialising. but if and when they materialize, it is of the essence to cope with them, control the damage and overcome the crisis as effectively as possible. the resilience of the economy, reinforced by its flexibility, is, in these circumstances, a crucial feature. for these three reasons, flexibility fostered by bold structural reforms is of the essence in the current global economy. another way of presenting it would be to say that in today ’ s world, marked by technological revolution and economic globalisation, the opportunity cost of not being flexible has considerably augmented. i thank you for your attention.

notion that the eurosystem could also make a contribution, for instance, by providing bridge loans. i don ’ t think that ’ s a good idea. true, a central bank can provide emergency liquidity – but only if a bank is suffering from temporary liquidity shortages. however, it may not, and should not, contribute aid towards resolution or restructuring, as this can easily cross the line into fiscal policy. as a last resort, however, the fund could request public financial assistance for example, from the esm, as there could be threats which, in extraordinary cases, could require recourse to public funding. 5. direct recapitalisation through the esm public funds is a buzzword and a hot - button issue, one that is inseparably linked to the question : who is the public that is supposed to be doing the funding? should nation - states be called to pay up whenever a crisis occurs, or should there be a joint european fund? i see no compelling reasons why the costs of bank restructuring should be shifted entirely to the european level. you see : the weal and woe of a bank depends not only on the competence of its management but also on external factors : the quality of supervision ; the financial and economic strength of its borrowers, which in turn hinges on a nation ’ s economic policy ; and also the fiscal policy of the country where a bank is based. ample proof of this assertion is bis central bankers ’ speeches provided by the fact that a bank ’ s funding costs are dependent on the sovereign credit rating of its home country. although we will be centralising supervision in europe next year, other factors such as economic and fiscal policy will remain largely the responsibility of individual nations. and, as long as that is the case, the arguments for shifting losses completely to the european level do not appear to be compelling. the balance sheet assessment provided for by article 27 of the ssm regulation also acquires major significance in this context : this article requires the ecb to assess the portfolio quality of the banks it will be supervising in future. what the regulation does not say, however, is what happens if hidden losses are disclosed. i have two things to say about this. i consider the balance sheet assessment to be very important. for it to be successful, we should base our assessments of banks ’ balance sheets not only on supervisors ’ judgements. we should also enlist outside specialists – external auditors – for a quantitative assessment. not only