above. as a result, the system could run a rising deficit as from 2025. it should also be highlighted that the latest demographic developments, in particular the heightened migrant inflows into spain, do not resolve the problem. at best, the inflow of working - age immigrants holds back the increase in the dependency ratio derived from population ageing and, therefore, delays the emergence of the problems. but the full scale of these problems will persist. how can we tackle the challenge that demographics pose for our pension system? the scale of the problem calls for a three - pronged strategy. first, the strategy should be far - reaching, i. e. blending measures on different fronts. specifically, the measures should pursue healthy public finances, implement structural reforms in the economy and seek to reform the pension system, as i shall now expand upon. second, discussion of these measures should not stretch out over time. and, finally, the reforms should have sufficient scope, acting along the lines of the recommendations made in the review of the toledo pact. regarding the scale of the strategy, its first pillar should be based on maintaining healthy public finances. once again, we should adopt a medium - term perspective here. irrespective of the fact that 2008 saw the re - emergence of a budget deficit and that, almost certainly, it will hit significantly higher levels in 2009, two matters will be vital in the medium term, once the effects of the economic crisis have abated. we must resume a healthy public finances path and, above all, bring public debt back onto the declining trend witnessed recurrently, with the exception of 2008, since 1997. these considerations also clarify why the rise in the budget deficit cannot go unchecked in the current situation, so as to prevent a strong increase in public debt arising, which would impose an excessive burden on future generations. in this respect, commitment to the medium - term fiscal rules laid down in the stability pact at the european level and in spanish budgetary stability laws continue to offer the best guidelines for conducting fiscal policy. secondly, as the specialist reports emphasise, from the macroeconomic standpoint the public finance sustainability problems are eased if employment and productivity in the economy trend favourably. here the room for improvement is extensive and calls for structural reforms in many areas, such as the labour market and the markets for goods and services, along with education and job training. once again, the time perspective is important here. the long - term view that should

underpin any analysis of the sustainability of the pension system is perfectly compatible with the fact that many of the reforms needed to improve employment and, above all, productivity in the economy can only bear fruit after a relatively lengthy period of time. these two pillars of the strategy are evidently important. and tackling the problem of the impact of population ageing on the pension system in the long run will also require reforms. further, these pension system reforms will complement the structural reforms mentioned earlier, in particular those relating to the labour market, and the reform to maintain healthy public finances. it is this matter which is central to this committee ’ s mission. it has been working intensely in this connection over the past decade, particularly on how to modify the pension system ’ s current parameters to ensure its long - term sustainability. that brings me back to two other key aspects of the strategy to be agreed : the speed and scope of the changes to be made. although the emergence of the first deficit in the system may appear a long way off, it should be borne in mind that the reform planning and implementation horizon is also long. accordingly, the reforms should be discussed without delay so that, following their gradual implementation, they may prove fully effective when population ageing begins to exert a more virulent effect. pension system reforms must also be sufficient. since the signing of the toledo pact and its subsequent renewal, various legislative amendments – which may generally be seen as in the right direction – have been made. examples include the ( still incomplete ) separation of the sources of financing of the social security system, the unification of the contribution bases, the creation of the reserve fund and the progressive simplification of the different contribution schemes, among others. however, among the pact ’ s recommendations are other measures worthy of discussion, since they may considerably impact the system ’ s sustainability. at this stage we should ask ourselves which pension system reforms merit assessment. the range of possibilities is an extensive one, and a decision on which reforms should be made requires not only an expert assessment but a political one too. resolving the system's problems may involve changes in the parameters of revenue or expenditure, but choosing the right or the most reasonable mix requires considerable political assessment. yet some combinations may be preferable to others from the standpoint of economic efficiency in that they may generate greater incentives, for instance, to join the labour market. in this respect, what is important from a technical viewpoint is to maintain a high degree of proportionality between