created some discomfort especially within your house. but overall, let us recognise what has been achieved : first, the six - pack, the two - pack and the fiscal compact have made the governance framework more commensurate to the challenges of a monetary union. this was an important step towards sound public finances in the euro area. second, improved financial regulation ( as exemplified by crd iv and by the compromise reached on the brrd ) and the gradual steps towards a true banking union ( with a single supervisor, a single resolution mechanism and a harmonised framework for national deposit guarantee schemes ) will importantly reduce the risk that a crisis of the magnitude that we have just experienced will materialise again. third, in 2010, there had been no arrangements in place to deal with member states losing market access. this absence had created major uncertainty in markets about the way forward. with the esm and the two - pack, both a permanent funding instrument and a governance framework have been created. this has been a major step forward and will ensure that in the future, the euro area will be better prepared to respond to such crises. in historic perspective, five years are a blink of an eye. in less than five years, the euro area has taken a remarkable leap forward that has kept us together. this cannot be highlighted enough in the weeks to come. the next five years ahead – towards completing the union i have no doubt that from july on the next parliament will continue to assume the important role this house has played in the last legislature. the challenges that still lie ahead of us are too important and too complex to indulge in complacency. it is too early to claim “ mission accomplished ”. people in the euro area are still suffering from the inevitable adjustment process following years of accumulated imbalances. unemployment remains unacceptably high. citizens are judging europe on its capacity to deliver jobs and sustainable growth. the years to come are about creating a more perfect union that caters to these objectives. foremost, this means delivering on commitments made in the past. member states need to keep their promises to correct imbalances and to reform the structure of their economies. fiscal policies have to be brought in line with the provisions of the stability and growth pact and of the fiscal compact. fiscal consolidation should be designed in a growth friendly manner while structural reforms will boost potential growth. this concerns all member states, not just those who looked at some point into the abyss of losing market access. this concerns

the early stages of the current financial crisis, the cesee countries performed relatively well compared to other world regions, and increases in risk premiums and downward revisions of growth prospects were rather contained. however, with the tightening of the crisis in the fall of 2008, the collapse in world trade and the global increase in risk aversion, emerging market economies in general came under considerable constraint. moreover, country - as well as region - specific vulnerabilities moved into the focus of market participants and investors. credit default swaps increased, but the increase was not at all homogeneous across cesee countries. with the change in global investors ’ sentiment, growth prospects for cesee countries had to be revised downwards substantially in the recent past. since the cesee region experienced growth rates well above the western european average, the turn in economic activity looks particularly sharp. according to the latest forecast by the european commission, gdp growth in several cesee and commonwealth of independent states ( cis ) countries will be below the euro area average, implying that the catching - up success of previous years will come to a temporary halt. among the countries hit hardest by the financial crisis are ukraine, the baltic countries and hungary. however, cesee countries must not be seen as a homogenous region. the financial crisis has a stronger impact on countries with weaker economic fundamentals, insufficient policy credibility and large economic imbalances. but the outlook for the cesee region as a whole still remains more optimistic than for the euro area. and in the years to come, the region will have higher trend growth rates, on average, than the " old " eu member states, simply because they are still in the process of convergence toward higher gdp per capita. thus, cesee will remain a driver of economic growth in europe for the foreseeable future. for the moment, however, direct and indirect external support is needed as a decisive measure to prevent recession in cesee from becoming worse than in the euro area. although the catching - up process in most cesee and cis countries over the last years was impressive, it was also characterized by some erroneous trends. let me stress two aspects that have made the affected countries extremely vulnerable to external shocks. first, in some countries credit has probably been expanded too fast. the rapid process of financial deepening needed to fund the elevated rates of economic growth in the cesee region was often accompanied by a rise in foreign ownership in the banking system. this was typically a win - win situation