of my remarks today. strengthening growth the economic situation in greece has started to pick up this year, with the economy stabilising and seasonally - adjusted real gdp increasing by 0. 2 % quarter - on - quarter in q2 2013. overall, gdp growth is expected to turn positive next year at 0. 6 %. but while these are welcome developments, they still represent a relatively weak recovery, especially given the depth of the recession that preceded it. in my view, to add momentum to this recovery and lay the foundations for medium - term growth, the authorities need to address three challenges. first, increasing the economy ’ s external competitiveness ; second, bis central bankers ’ speeches ensuring the banking sector can fund the recovery ; and third, attracting productive foreign investment. increasing external competitiveness as greece is undergoing a simultaneous deleveraging in its public and private sectors, sectoral accounting tells us that its external sector must go into surplus. the key for growth is to ensure that this happens as much as possible through higher exports rather than import compression. the best way greece can achieve this is by improving its price competitiveness. price competitiveness is particularly important for greek firms as their exports are largely concentrated in low - tech products. at the end of the last decade, high - tech or intermediatetech products represented only 28 % of total exports, compared to nearly 50 % for the eu average. yet since euro entry price competitiveness in greece has actually been on a worsening trend. according to the commission, the real effective exchange rate ( on an hicp basis ) in greece was still rising until 2011. to facilitate an export - led recovery, this trend has to be corrected and there is no way this can be achieved in the short run other than by adjusting prices and costs. i know the difficulties that such adjustment creates and the criticisms that are levelled against it. but we are in a monetary union and this is how adjustment works. sharing a currency brings considerable microeconomic benefits but it requires that relative prices can adjust to offset shocks. this process has already begun in greece today. thorough labour market reforms have reduced labour costs significantly. costs have now fallen by around by 18 % since 2009, with wage adjustment being the main driver of that fall. indeed, compensation per employee has fallen by about 20 % in this period. but the translation of cost competitiveness gains into prices has been too slow – notwithstanding the encouraging recent trend of disinflation. this is largely because reforms in product

. they would not help to promote fiscal discipline and could create higher costs in the long run. and they would do nothing to address the fundamental weaknesses in the greek economy. in short, the path of easy answers leads to stagnation, decline and an over - burdening of the young and future generations. from what i see today, i trust that the greek people know which path they need to take. a recent poll shows that 69 % of the public supports the euro – and being part of the euro means taking tough but necessary decisions. responsible choices and reliability are the preconditions for solidarity. greece has already received support from other euro area countries equivalent to 17, 000 euro per greek citizen. and, provided that it complies with the programme, those countries are committed to supporting greece until it regains market access. in short, all the conditions are present for greece to return to prosperity – and for the sake of both current and future generations, i trust that greece will make the most of them. bis central bankers ’ speeches