2. developments in the household sector the positive influence of the strength in the corporate sector has been feeding through into the household sector at a moderate pace. the number of employees continues to increase steadily. a closer look reveals that not only the number of part - time workers but also that of full - time employees is rising. a survey conducted by a private institute earlier this year indicated that more new graduates would be hired by firms in fiscal 2007 than in the previous year. despite the strength in the corporate sector, however, it is often said that households are not getting a real sense that the economy is expanding, and this seems to be related to the wage situation. to be more specific, the increase in nominal wages per worker, which had been only moderate, has recently appeared to stagnate. regular payments are particularly weak, remaining somewhat beneath the level recorded last year. the sluggish growth in wages despite continued high corporate profits seems attributable to persistent labor cost restraint by firms, which feel the need to be more profit - conscious amid intensifying global competition and greater exposure to the discipline of the capital market. moreover, employees'preference for stable employment over a wage increase after their past experiences of a severe employment situation, as well as the retirement of baby - boomers whose wage levels are relatively high, are also thought to share responsibility for the recent weak growth in nominal wages per worker. meanwhile, firms are increasingly feeling shortages of labor as shown in the march tankan. if the number of employees keeps increasing while growth in the population of those aged 15 and over peaks out, upward pressure on wages should be expected to increase over time. although the focus of attention tends to be the weak growth in regular payments, the positive influence of the strength in the corporate sector should not be overlooked, as this is now feeding into the household sector via various channels, such as increases in the number of employees, the wages of part - time and temporary workers, and dividends. although the pace at which the positive influence of the corporate sector has been filtering through into the household sector has been somewhat subdued, the gradual increase in household income is expected to continue, supported, for example, by growth in the number of employees on the back of continued high corporate profits. with household income increasing gradually, private consumption has been firm recently. in summer 2006, private consumption declined temporarily due to unfavorable weather conditions and consumers'reluctance to buy before the introduction of new products ; then from the

solidly in place, you cannot expect foreign investment to return to italy. if you look at the last “ doing business ” index of competitiveness, italy is again extremely badly placed ”. so “ easiness to do business ” comes from labour legislation and, more in general, from laws and bureaucracy. but what else should be changed? “ also, unit labour costs are too high. this does not mean, of course, that salaries are too high in absolute terms, in fact the take - home pay is low in italy on average in international comparison. unit labour costs are high because productivity growth has been too low in italy. but salaries cannot increase unless productivity increases, and productivity cannot increase unless the overall level of competitiveness of the country improves dramatically. among the countries where sovereign bonds have been under pressure, italy is the only one where labour cost competitiveness is not improving relative to the best performers in the euro area. this is a concern, also for growth perspective. you see, italy is a country with a fantastic human capital, some of the best universities, a lot of creativity and cultural richness. but more worrisome is the difficulty of society to work together, to come to agreed long - term solutions, to redress its governance. it seems to me that this is really the biggest issue ”. how is the situation in public finances, in your opinion? “ while still increasing, the public debt level is on a better medium term trajectory thanks to reduced annual fiscal deficits. to keep public debt on a sustainable path, it is essential that the government sticks to its fiscal commitments. this means that fiscal efforts cannot be relaxed. for example : to have a debt / gdp ratio of 100 % in 2025, you would need, from 2016 on, a primary surplus of about 4, 5 % of gdp. it is possible, and other countries have kept their primary balances at those levels in the past, but it requires efforts and commitment. in this respect a major achievement is to have put the fiscal compact into the italian constitution. i would also like to stress that the adoption and implementation of structural reforms leading to a path of higher economic growth would make possible a stronger reduction of debt for a given fiscal effort. ’ ’ bis central bankers ’ speeches but austerity has been questioned, also by the imf : in some countries it even worsened the recession. “ the impact of fiscal consolidation greatly depends on how you do your consolidation, on whether you increase