the permitted retirement age in their sustainability mechanisms. others have undertaken a broader change, adopting a notional definedcontribution accounts system, which has some advantages in terms of increasing the transparency of the system. moreover, against the background of a significant rise in the dependency ratio and future reductions in pension replacement rates, it might make sense to extend the role of retirement saving to complement the resources of the public contributory system with the accumulation of financial assets supplementing future public pensions. in any event, implementing a funded system is complex and requires detailed prior analysis of issues such as the length of time needed to implement it, whether it is voluntary or compulsory, the returns it can offer in a scenario of demographic stagnation and sluggish productivity growth, and how the costs associated with implementing this change are to be shared out intergenerationally. 2 ) as regards new sources of funding, the alternative is to raise social contributions or other taxes, or permutations along these lines. increasing social contributions may have adverse consequences for employment, since their weight in overall taxation is already higher in spain than in other comparable countries. for example, the elimination of ceilings on the contribution base would significantly raise revenues, but it would also mean a substantial increase in labour costs, and if there is no parallel increase in maximum pensions the relationship between contributions and benefits which, in my opinion, should be preserved, would be considerably weakened. another option would be to confine the concept of contributory pensions exclusively to retirement pensions, which would continue to be funded from social contributions, while other pensions would be funded from general taxes. clearly, this would require increasing general taxes, or reducing other public expenditure in order to be able to pay for the pensions transferred from the social security fund to central government. as regards raising general taxes to pay for pensions, it is crucial that the resulting tax basket has the mildest possible distortionary effects on growth, bearing in mind the point of departure. 5 / 6 to conclude, i would like to share three considerations with you. firstly, i would like to highlight that the recent reforms have built in an automatic mechanism for the financial equilibrium of the pension system ( sustainability factor and revaluation index ), bringing it closer to other european public pension systems. this automatic mechanism, as it is currently defined or under alternative definitions in the future, should be preserved. secondly, current regulations or any additional reforms should be implemented as transparently as possible in order to give the public the necessary information about

. in addition to upholding past achievements, further reform efforts are needed across the euro area, as outlined in the 2015 countryspecific recommendations, which each year identify key objectives in tackling remaining vulnerabilities and rigidities. it is only through such reforms that we can avoid a build - up of new imbalances and bring growth rates back to levels that ensure prosperity and allow households and member states to grow out of their debt. improving the functioning of the labour market remains key in this respect, with a view to ensuring a rapid adaptation to shocks or structural change. this area remains an important challenge in portugal, as also mentioned in the 2015 country - specific recommendations. taking further action is all the more important, with high unemployment, according to the latest eurobarometer, being considered the main concern to the people of portugal. but we also need reforms that encourage firms to invest. investment raises both supply tomorrow and demand today. such reforms include measures that further improve the business environment. however, investment could also be helped by addressing the corporate debt overhang. for instance, increasing the efficiency of debt restructuring tools could disburden still viable companies and thereby facilitate their investment plans. the european semester, in which these country - specific recommendations have been issued, should be a good framework to push for such a new effort. however, the countryspecific reform recommendations, as just indicated by the commission, have so far hardly or not at all been acted upon by member states. stepping up the reform momentum is therefore essential. in this respect, i have noted with great interest that you will be discussing the national reform programme later today. indeed, greater ownership not only by national governments, but also by parliaments and bodies such as this one would be crucial for the european semester to gain more traction and yield better results. making economic and monetary union work in the long run these are efforts that should be undertaken by countries individually. but there is also work to be done collectively. most importantly, governments should work towards completing economic and monetary union ( emu ). emu remains an incomplete construction. and while steps have been taken to strengthen the economic governance framework and to make our financial markets safer, this incompleteness amplified the effects of policy mistakes in the run - up to the crisis and continues to leave emu fragile and its member states vulnerable to shocks. in principle, we know where the weak spots in our construction are. the five presidents ’ report provides a road map on how