has been made with respect to resolving npls, and a comprehensive action plan to deal with legacy asset quality issues was adopted by the council of the european union and is now being followed up by eu and national authorities. the ecb has published guidance to banks on npls and a draft addendum, currently subject to public consultation. with respect to financial stability, we observe that at the current stage the euro area ’ s position in the financial cycle is consistent with the ongoing economic recovery. there are no indications of widespread asset price misalignments and credit developments remain modest. nevertheless, relatively buoyant real estate dynamics and high household debt levels in some countries warrant careful monitoring. we expect the national macroprudential authorities in the euro area to remain vigilant and ready to use the macroprudential policy instruments at their disposal to counteract the any emerging risks when necessary. within its macroprudential mandate, the ecb will contribute to this end. despite the potential for monetary policy to influence economic growth in the short term, strong, sustainable and balanced growth requires other policymakers to assume their responsibilities. from a global perspective, one of the key ingredients for raising potential growth and productivity is openness. open trade, investment and sustainable financial flows play a key role in the crossborder diffusion of new technologies that drive forward efficiency improvements. preserving openness is thus key to strengthening global growth potential. it should be underpinned by effective multilateral cooperation, including in the field of financial regulation and supervision. as regards the euro area, strengthening its long - term growth potential calls for decisive action to address the remaining structural issues. reform implementation needs to be substantially stepped up, with further actions to improve the business and regulatory environment aimed at boosting investment and increasing productivity. labour market rigidities need to be reduced further to enhance job creation and reduce unemployment, especially for young people. to foster reform implementation at country level, a full and consistent application of the eu ’ s policy framework is required, including the european semester and the macroeconomic imbalance procedure. likewise, full and consistent implementation of the stability and growth pact remains crucial to ensure confidence in the eu ’ s fiscal framework and to safeguard public debt sustainability. in the current environment, a broadly neutral euro area fiscal stance strikes an appropriate balance between aggregate stabilisation and sustainability needs. although such a euro area stance is prevailing, the contribution of individual member states to the aggregate outcome is suboptimal. some of them

##economic fundamentals that are our best buffers. 8. it is trying times like these that remind us of how interconnected we are and how important it is for the imf to continue to play its role effectively as the guardian of global economic and financial stability. in our view, the fund ’ s role is determined by its mandate. the fund cannot do what it was not built to do. for example, it is neither a regulator nor a central bank. as we see it, the fund ’ s role is in analyzing and evaluating policies and its impact, facilitating dialogue and disseminating, both the warning signs and the lessons learnt, providing guidance and lessons learnt, forcefully where necessary. to this end, we see three areas where the fund can be useful : • the first is in providing policy guidance to individual members. within its surveillance mandate, the fund should be advising members what to do and how best to respond to the fallout from the crisis. • the second is in the provision of appropriate financing instruments to ensure that members are able to ride out the turmoil. the recent market jitters are clear reminders of a still - fragile global financial system. another crisis is inevitable – it is just a matter of time – and the fund must stand ready to support its members when that happen. in this regard, the review of access limits and the development of crisis prevention instrument, such as the rapid access line ( ral ) and the financial stability line ( fsl ), are critical and should be given priority. • the third is in facilitating a global dialogue such as the imfc meetings. it is probably wishful thinking to expect a large diverse group such as this to agree on policy coordination strategies. nevertheless, even the more modest goal of learning from one another has great value by serving to deepen our understanding of the issues, which should not be underestimated. the fund ’ s governance reform 9. in an increasingly integrated global economy, the distribution power within the fund must adapt to reflect the growing weight of developing and emerging market economies in order to make the fund more effective as an institution. giving voice and ownership to member countries will increase the legitimacy and efficacy of the imf. in this regard, we have indeed come a long way from where we started two years ago. we thus would like to thank the imf executive board, management, and the staff for their dedication and hard work in delivering the current quota and voice reform package before us. 10. we welcome the