term economic growth, the composition of the fiscal adjustment is very relevant. moreover, the combination of this consolidation efforts with other structural reforms on which i will focus later might be crucial in order to smooth and reduce the public finances adjustment needs. in addition, given the high degree of decentralisation of public spending in spain, all government decision centres must contribute to this effort. to this end, it is crucial to provide efficient mechanisms to finance the different competences, permitting citizens to identify the bodies responsible for implementing the different public policies. on a related matter, let me mention that the adequate access to external financing by regional governments – be it by credit provided by financial institutions or through the capital markets – is of particular importance to avoid a pro - cyclical stance in the provision of the public services, and guarantee market pressure geared towards fiscal discipline. currently, an exceptional mechanism is in place, namely the “ fondo de liquidez autonomica ”, whereby the central government provides funds to most regions, in the form of bilateral loans, in exchange for a heightened control over their fiscal policies. however, in the current favourable macroeconomic and financial context, regions should regain market access. challenges of the spanish labour market the second session of the conference is devoted to the challenges facing the spanish labour market. during the last three years, the annual growth rate of employment has been 3. 0 %. in the last five years, the unemployment rate decreased to 16. 5 % at the end of 2017, more than 10 pp below its peak at the beginning of 2013. despite these positive developments, unemployment is still at unacceptably high levels, in fact, the second highest in the euro area after greece. the high incidence of long - term unemployment, which now stands above 50 %, is signalling the risks of hysteresis in the labour market, which would make the reduction of the unemployment rate to pre - crisis levels more difficult. from a longer perspective, the spanish economy also faces three important challenges. first, even at the height of the last expansion in 2006, spain had an unemployment rate of 8. 2 % which was far off the best performers at that time. second, during recent decades, 5 / 9 the segmentation of the spanish labour market has been very marked, with a temporary rate exceeding 25 %, 10 pp above euro area averages, which contributes to exacerbating the volatility of employment and reducing productivity growth. third, the spanish economy should be ready

the us economy. for policymakers, the most troubling aspect of this pessimism is our inability to ascertain its cause ( or causes ) : is it geopolitical uncertainty? the aftermath of the accounting scandals of last summer? concerns about the ultimate profitability of new technologies and products? the depressive side of keynesian animal spirits? this pessimism does matter, if for no other reason than because it has the potential to become self - fulfilling. for example, high - tech equipment and software will have to play an important part in any investment recovery this year ; and as we have seen, this category may be particularly sensitive to management beliefs and expectations. time will tell how pervasive these downbeat attitudes are and what effects, if any, they will have on investment and the economy. in any case, the clear lesson of recent experience is that forecasting investment requires close attention to the expectations of those responsible for making capital expenditures. understanding these expectations and their implications is yet another challenge that policymakers must face as we do our best to help the economy toward full recovery.