of the adjustment in external imbalances since the crisis has been cyclical, not structural according to the imf, the us current account deficit is projected to reach about 3 % of gdp in 2011, against surpluses of roughly 5 % and 9 % of gdp for china and oil exporters respectively. they are a source of tensions that could ultimately lead to protectionist pressures. however, the euro area as a whole has a balanced current account position. global fiscal imbalances remain significant, with a marked degree of heterogeneity between advanced and emerging economies. consolidation efforts required to bring public finances to a sustainable path are a key priority for advanced countries. efforts made to adjust these imbalances remain clearly insufficient. this raises the risk, which i referred to earlier, of a disorderly unwinding down the line, with significant potential fallouts for global financial markets and the global economy. at their cannes summit on 3 – 4 november 2011, g20 leaders agreed on an action plan to lay the foundations for strong, sustainable and balanced global growth in the medium - term. this is welcomed. all g20 members made commitments, but they are sometimes imprecise. it is often unclear as to how these commitments can genuinely contribute to a rebalancing of global demand patterns. for instance, only a few of the g20 members explicitly reaffirmed their support to the solemn pledge by their leaders in toronto last year to halve fiscal deficits by 2013 and stabilise public debt ratios by 2016. large emerging markets have announced that they would enhance the flexibility of their exchange rate regime, but without indicating a specific time - frame when this would occur. europe is doing its share in committing to accelerate and further deepen the single market. more decisive policy measures to rebalance global demand patterns are still required, in particular to raise savings in deficit economies and increase domestic demand in surplus economies. all systemic economies could benefit from effective multilateral surveillance along with their international responsibilities. now is not the time to lose sight of the need to correct imbalances globally although our attention is – for good reasons – more focused on immediate challenges! * the second and related key global policy challenge relates to how best to address global liquidity conditions and volatile capital flow constellations. ample global liquidity conditions bis central bankers ’ speeches have the potential to push volatile capital flows into emerging economies. if they respond by accumulating reserves to cap exchange rate appreciation, this widens global imbalance

of governments to return to sustainable public finances, reduce risk premia in interest rates and thus support sustainable growth over the medium term. for all euro area countries, the 2011 budgets need to reflect the commitment to ambitious fiscal consolidation in line with countries ’ pledges under the excessive deficit procedures. any positive fiscal developments that may emerge, reflecting factors such as a more favourable than expected environment, should be exploited to make faster progress with fiscal consolidation. the urgent implementation of far - reaching structural reforms is essential to enhance the prospects for higher sustainable growth. major reforms are particularly needed in those countries that have experienced a loss of competitiveness in the past or that are suffering from high fiscal and external deficits. the removal of labour market rigidities and the strengthening of productivity growth would further support the adjustment process of these economies. increasing product market competition, particularly in the services sectors, would also facilitate industrial restructuring and encourage innovation and the adoption of new technologies. we are now at your disposal for questions.