market. this process will be furthered by european measures for the capital markets union. moving in this direction, we will soon publish for consultation regulations enabling foreign funds to make loans in italy. banks can respond to the downsizing of traditional channels by increasing proceeds from the development of new services. in seizing these opportunities, the necessary safeguards to prevent conflicts of interest must be put in place. the changing external context calls not only for greater financial awareness on the part of customers, but also for even stricter controls on the correctness of banks ’ conduct. the bank of italy is actively engaged on various fronts : it has stepped up its supervisory action with regard to the transparency and proper conduct of banks, with the goal of focusing their attention on service quality and increasing customer satisfaction ; it has strengthened the banking and financial ombudsman ; it assesses customer complaints of improper practices and assiduously calls upon banks to resolve disputes. together with consob and the government, we are working on enhancing consumer protection and financial education for bank customers, including young people, in bis central bankers ’ speeches the firm belief that this is a structural overhaul that necessitates a national plan, a collective effort, and a long - term commitment. for the banks that are in difficulty, swifter and more resolute cost containment is indispensable. the repercussions on the employees involved may be also softened by the recent expansion of eligibility for the solidarity fund for the banking industry. for minor banks the problems posed by the large stock of non - performing loans, scant diversification of sources of income and the need to adapt to technological developments may be acute. in several cases they must be dealt with by implementing farsighted consolidations that exploit potentially substantial economies of scale and scope. it is necessary to move rapidly in this direction, overcoming the outdated concept of mere local presence which has often aggravated rather than attenuated the problems of the real economy and of the banks themselves. * * * we are slowly, haltingly coming out of a lengthy period of crisis, not only financial and economic. the recovery is not yet on a firm footing. the consensus forecasts are that italy will not return to pre - crisis levels of income for some time ; estimates of our economy ’ s growth potential are disappointing. we can and must do more. monetary policy covers the whole of the euro area ; its contribution to keeping aggregate demand buoyant is crucial ; it is now providing highly favourable

in keeping with the inflation target for the euro area, the debt burden would have risen by only 3 percentage points, slightly less than the increase stemming from italy ’ s financial assistance to countries in difficulty ; had the positive effects of stronger growth on the government deficit been taken into account, the debt burden would have been lower. this simple exercise highlights the risk posed to the economy of a country whose competitiveness is lagging seriously behind and the importance of structural reforms to support its growth potential : they are all the more necessary when the public debt is so high. following the recession triggered by the global financial crisis, fiscal policy limited the deficit, curbing the growth of the debt - to - gdp ratio. the primary budget balance returned to surplus in 2011 and net borrowing was brought back below the threshold of 3 per cent of gdp in bis central bankers ’ speeches 2012. keeping primary current expenditure in check played an important role : after recording modest growth in nominal terms up to 2014, it remained practically unchanged last year. since 2014, when a particularly difficult three - year period for the italian economy ended, the fiscal policy has become moderately expansionary. the government seeks to reconcile support for growth with the reduction of the debt - to - gdp ratio, which was appropriately indicated as a strategic objective. in the government ’ s plans, the reduction is to begin this year and gain pace in the next three. the way in which the macroeconomic context will evolve could hinder the achievement of this goal in 2016. careful monitoring of the public finances and the implementation of a programme of privatizations could permit the debt - togdp ratio to approach the planned objective and ensure a significant reduction in 2017. with a view to supporting a faster, more durable recovery, it is necessary to revamp longdeferred targeted public investment, including in intangible infrastructure ; it is also important to further reduce the tax wedge on labour, bolster incentives to innovate and provide income support for the less well - off, hit especially hard by the crisis. while the budget affords limited leeway for these measures today, it is possible in any event to plan their implementation over a longer time horizon. building europe : progress and uncertainties the present conditions and prospects of the individual countries of the euro area are closely linked to those of the european construction. for years the area has withstood formidable tensions. the effects of the global financial crisis had not yet been absorbed when the sovereign debt crisis erupted. triggered by weaknesses in