is not only on the weak productivity growth observed so far, but also on the strong wage growth at the current juncture. for germany, the latest wage deals have increased pay levels significantly. and relatively high wage settlements look set to be reached in the forthcoming pay negotiations as well. understandably, the trade unions are looking to achieve lasting compensation for the real wage losses accumulated over the past three years. because inflation compensation bonuses will only be exempt from taxes and social contributions until the end of this year, the trade unions are now stepping up their demands for permanent wage increases. the still high willingness to strike and persistent widespread shortage of labour suggest that wage growth will remain comparatively strong. the longer - term outlook, too, indicates that labour scarcity in germany will remain a key factor driving robust wage growth and thus high inflation in the domestic economy. in the euro area, growth in negotiated wages slowed significantly in the second quarter. however, this was due in part to a one - off effect in germany ( owing to inflation compensation bonuses paid out in the previous year but absent this year ). the persistent labour market tightness in the euro area means that a quick let - up in wage dynamics is unlikely. with wage pressures easing only slowly, the disinflation process is proving to be slow and arduous. right now, inflation is not yet where we on the ecb governing council want it to be. headline euro area inflation stood at 2. 2 % in august, down from 2. 6 % one month earlier. that significant decline mainly came about due to energy prices. whilst it is true that german inflation – as measured by the harmonised index of consumer 3 / 7 bis - central bankers'speeches prices – has reached 2. 0 %, i'm afraid to say that, for the time being, that level is probably not yet here to stay. services inflation in the euro area is still worryingly high, coming in at 4. 1 % at last count. core inflation has eased only marginally, dropping to 2. 8 %. according to the latest ecb staff projections, euro area price inflation will be back at the 2 % mark at the end of 2025. the journey there remains uncertain and include a few bends. for instance, inflation rates are expected to edge somewhat higher again towards the end of this year due to energy prices being in decline in the fourth quarter of last year. overall, though, we have made huge advances towards safeguarding price stability.

s claessens, r j herring and d schoenmaker, a safer world financial system : improving the resolution of systemic institutions, 2010. quoted from a turner, the turner review : a regulatory response to the banking crisis, march 2009. the fsb key attributes specifically mention the supervisory and resolution authorities, the central banks, the finance ministries and the bodies responsible for statutory deposit protection. bis central bankers ’ speeches october 2012. as the second component, the institutions themselves must submit plans describing how they envisage a potential restructuring and discuss them with supervisors. ideally, the supervisory authority would be able to take these plans out of the drawer in the early stages of a crisis and restructure the institution in cooperation with the resolution authority. this planning process is useful for the institutions as well. according to a recently published survey involving 19 big financial institutions, 40 % of those questioned claimed to have drawn up complete recovery plans. despite the costs involved, the majority of the surveyed institutions see the advantages in this planning process, for example in that they provide a better operational understanding of the business structures. 6 if restructuring is not possible or fails, the third component comes into play, namely that of resolution planning, which is to be developed by the authorities. the purpose of this is to prepare for the effective use of the resolution tools. the resolution of an institution has to be planned in such a way that systemically important functions performed by the institution are continued, the stability of the financial system is not jeopardised, and the use of taxpayers ’ money is avoided. 3. from standard - setting to the application of the new rules 3. 1 the european commission ’ s proposal for a directive ladies and gentlemen, these and other standards from the key attributes are a milestone on the road to containing the too - big - to - fail problem. on the one hand, the fact that international consensus has been reached with the backing of top g20 policymakers can be considered a success. on the other hand, a great deal of detailed work remains to be done since the fsb key attributes still have to be transposed into legal texts which, by necessity, have to be much more concrete than the international standard. just how difficult this is may be seen from the fact that the publication of an eu legislative proposal originally planned for the summer of 20117 has since been postponed several times, and has yet to be presented. i do appreciate the fact that, before making a publication, the european