of the response from the tradable sector, in particular the exports that rebalanced the external accounts and mitigated the impact of lower domestic demand on the non - tradable sector. 3. the maintenance of confidence in the banking sector as evidenced by the behaviour of deposits. this was crucial to preventing the economy from collapsing with a credit crunch and avoiding the imposition of capital controls. it is important to remember that an adjustment programme is always a short - term programme whose effects are only sustainable if there are structural and institutional adjustments that prevent repetition of the conditions that led to the need for adjustment. over the last decade, portuguese gdp has remained 30 – 40 % below the eu average, without converging towards the richest economies. a lasting trajectory of growth and convergence towards our european partners depends on our capacity to generate and maintain high levels of employment and productivity. this is a necessary condition to ( i ) bring our workers ’ wage levels closer to european standards ; and ( ii ) finance the welfare state in a context of unfavourable demographic developments. the challenge is thus one of activating the ‘ levers ’ of employment and productivity. portugal has had historically low levels of capital per worker. adverse developments in business investment during the crisis, with a reduction of 34 % between 2008 and 2013, contributed to capital shortages. it is therefore vital to increase investment and take advantage of that recovery to learn from past mistakes, scrutinising investment projects in a far more demanding way. the infrastructure and support services are available, the investment in the non - tradable sector has been made. now that must be capitalised upon, creating capacity in the economy ’ s tradable sector. the recovery in investment is, however, constrained by the ( still ) high indebtedness level and low savings rate of the portuguese economy. this means that the increase in investment will have to be financed through an increase in equity, either from existing shareholders, or the entry of new domestic or foreign shareholders. in portugal, employees ’ skills have improved considerably in recent years but gaps remain in relation to european averages. the formal education of our workers must continue to improve. in particular, those in employment the longest but with fewer qualifications have a lot to benefit from life - long learning, which enables them to transform their skills and better take advantage of the jobs of the present and future. moreover, we also need management models that encourage openness to risk and favour decentralised decision - making

between monetary and fiscal policies, their roles and limitations for macroeconomic stabilisation and the adequacy of the current stability and growth pact are ever more at the forefront of the policy debate. all these issues need to be addressed. i have already underlined the importance of a coherent and sound legal and institutional framework. we must, however, be aware that, even with appropriate rules and institutions, a monetary union is not immune to exogenous shocks and specific problems in any of its members. the emu needs stabilisation mechanisms to support member states facing serious financial difficulties while safeguarding the stability and cohesion of the group. this need is one of the major lessons of the financial crisis and the reason for the creation in 2010 of a temporary rescue fund, the european financial stability facility ( efsf ), and subsequently, in 2012, of a permanent institution, the european stability mechanism ( esm ). both the efsf and the esm have played a vital role in safeguarding the stability of the euro area as a whole, functioning as a common firewall and providing support to the most affected member states to resume or maintain access to sovereign bond markets. together with fiscal and structural reforms at european and national levels, the ecb ’ s unconventional monetary policy and the establishment of the banking union, these funds were instrumental in dealing with the worst of the crisis and to save the integrity of the euro. reform of the esm is on - going to reinforce its role, its operational capacity and the effectiveness of its instruments. this reform must be seen as an integral part of the agenda on deepening emu and needs to be ambitious. i have always argued that the esm should evolve towards a true european monetary fund, a robust crisis management body, incorporated into eu law. an independent and accountable institution with a clear mandate and adequate resources and firepower. these are necessary conditions for the development of win - win solutions. the work currently underway on the esm treaty should therefore not be seen as the final result, but as a step towards a more ambitious long - term goal. let me conclude. 3 / 5 bis central bankers'speeches during its first 20 years of life – and contrary to the initial bad omens – the euro ’ s institutional framework has proven its ability to overcome the difficulties stemming from the coexistence of economies in different stages of development, and sovereignty - sharing mechanisms have acted as a proxy for a central political power. today ’ s