reforms to address the structural weaknesses of the european economy. policy - makers in europe know what their “ to do list ” is in this respect. it includes : 1. reforms to strengthen competition in goods and especially in services markets ; 2. reforms to increase flexibility and adaptability in labour markets ; 3. reforms to improve education ( including on - the - job training and lifelong learning ), boost research and development, enhance innovation and facilitate the diffusion of technological advances, so as to fully exploit the potential of an increasingly knowledge - based economy ; 4. policies and institutions to create a more favourable business climate ; 5. reforms to foster integration, competition and innovation in european financial markets, with a special emphasis on venture capital : and 6. reforms to enhance the quality and efficiency of public expenditure and of tax and benefit systems, and of the sustainability of public finances. to carry out these reforms, the eu governments have set targets and made commitments within a rules - based framework. what is needed now is to honour these commitments and to actually implement what has been agreed. and the current economic upswing in europe certainly provides a propitious opportunity to press ahead with the necessary reforms, as well as with further fiscal consolidation. after all, there is no better time to reinforce the roof than when the sun is shining! moreover, it is also important for the economies of the member states in the monetary union – where the single monetary policy is geared towards maintaining price stability for the euro area as a whole – to preserve and enhance their competitiveness position. diverging inflation and competitiveness developments in individual member countries can have an undesirable impact on the performance of the national economies. given that the single monetary policy cannot – and therefore should not – be used to alleviate the effects of such regional divergences, structural reforms and economic policies in individual countries should be employed to address any country - specific persistent adverse inflation developments or losses of competitiveness. iv. concluding remarks let me come to a conclusion : we have gathered here in delphi, the seat of the delphic oracle. what would the oracle predict for europe ’ s future? i will not try to guess. incidentally, jean monnet was equally cautious in forecasting the future of the european construction, when he stated that “ nobody can say today what will be exactly tomorrow ’ s european structure, because tomorrow ’ s changes, which will be triggered by today ’ s changes, are unpredictable. ” as was often the case in the past,

of long - term growth : labour utilisation and productivity by appropriately influencing the underlying factors that determine the ability of the european economy to achieve increased efficiency and create more employment. in recent years, the rates of growth of both labour utilisation and productivity have increased, but there is room and need for further and sustained gains. let me briefly elaborate on the prospects and means. the recent and ongoing upswing in economic activity has been accompanied by a significant and steady increase in employment and a decline in the unemployment rate, which has dropped to the lowest level ( 7 % ) since the introduction of the euro in 1999. what is very positive is that these developments also reflect a continued rise in the labour force participation rate and a relatively stable number of hours worked per employed person, following a decline in hours worked in previous years. as a result, the overall rate of labour utilisation has increased and is likely to continue to rise partly in response to the labour market reforms implemented in many euro area countries that have increased the incentives to work and the employment opportunities. nevertheless, there is clearly scope and need for further improvement in the euro area labour markets. the labour force participation rate and the hours worked per employed person are still relatively low and the unemployment rate is still unacceptably high in comparison with other advanced economies and with the performance of the european labour markets twenty years ago. the good news that we are witnessing at present a job - creating economic recovery in all euro area countries is accompanied by another encouraging development with a potentially positive impact for sustainably higher longer - term growth : the productivity performance of the euro area has also improved recently. it is, however, too early to say whether this is a temporary or permanent improvement. but we do have evidence that, in certain sectors, and in a number of euro area countries, structural reforms and corporate restructuring have been raising productivity and are contributing to higher potential output growth. even though more information and analysis are certainly needed in order to reach a firm judgement on the extent to which recent productivity gains represent a structural improvement, i see two conclusions emerging from labour market and productivity developments for the euro area as a whole, and for its member countries : first, the experiences of a number of member states clearly show that reforms do pay off. and, second, further reforms are undoubtedly necessary in order to foster permanently higher growth in productivity and labour utilisation and thus faster long - term economic growth. there is growing recognition and consensus on the need for further substantial