r. a. mundell and a. k. swoboda ( eds. ), monetary problems in the international economy, university of chicago press, chicago, 1969. t. padoa - schioppa, “ il passo piu lungo ”, corriere della sera, may 3, 1998. t. padoa - schioppa, interview with la repubblica, august 6, 2008. bis central bankers ’ speeches perhaps the convergence process had been displaced, firstly, by the acceleration of the enlargement of the eu and increased participation in the eurosystem and, secondly, by a clear ( though according to some, irrelevant ) predominance of intergovernmental agreements over the so - called community method. the response to the crisis in this framework, after the global financial crisis and the very severe global recession in 2008 – 09, the full revelation of the conditions of greek public finances produced tensions, which then spread to the economically weaker euro - area countries, characterized by excessive public or private debt, a foreign trade deficit, poor competitiveness, and low economic growth. tensions grew with the bursting of the property bubble and the consequent disruption of banking in ireland. with the announcement of the involvement of private investors in restructuring greek debt in the summer of 2011, financial markets suddenly became aware of the implications of the ban on interventions to rescue member states under the treaty on european union. there followed a very serious crisis of confidence in the ability of the single currency to survive, with negative consequences for the real economies of individual countries and for the area as a whole. the list of potential causes of the crisis is rather crowded. fiscal imbalances, labour market rigidities and competitiveness deficits, insufficient innovation and productivity growth, excessive bank lending from core to periphery countries, all these have been good cause of lags, disturbances and vulnerabilities. but i believe that the sovereign debt crisis should be interpreted first and foremost as a major lack of trust in the future of the emu, the euro and possibly the eu. the severity of the sovereign debt crisis, which at some point threatened the very existence of the single currency, owes in part to the incompleteness of the emu project, which dramatically exposed the reversibility of even the major progress towards european financial integration made with the introduction of the euro. the rise in yield spreads between government bonds in the euro area was determined by two factors, one national

the government took steps to open up further the market for private services. various measures to revive the productive system are now set out in bills recently passed by the council of ministers. it is to be hoped that progress in this direction will continue, without deviating from the objective of improving competitiveness and efficiency at every point of the productive system. as far as incentives are concerned, automatic facilities for firms appear preferable as being less costly and distorting than discretionary measures, which rely on the public bodies concerned to select the sectors for promotion and choosing between different technologies and projects. such a model requires a remarkable capacity for strategic evaluation. if that is lacking, there is a serious risk of scarce resources not being optimally allocated. to promote growth, improving the environment in which the productive system operates is more important than augmenting or refining the incentives offered to firms. the areas needing action are many and well known. they include simplifying the regulatory and tax system, introducing rewards for merit and mechanisms of competition within the educational and training system, reducing the cost and enhancing the effectiveness of business services and local public services, promoting competition in the production and distribution of those services everywhere possible, and acting to ensure that the legal order and governmental authorities are guided by the values of the market and efficiency rather than the deleterious standards of legal formality and bureaucratic power. 3. the financial system ’ s contribution to growth 3. 1 the stock market and institutional investors structural reform must also extend to the financial industry. the possibility of direct or indirect recourse to the capital market plays an essential role in facilitating the expansion of firms that have growth potential. market access is assisted by the presence of a large stock exchange, a good number of institutional investors and a web of specialized intermediaries. progress on all these fronts is needed. as we know, the italian share market is smaller than those of the other advanced countries. both the number of companies listed and the ratio of their total capitalization to gdp are not only far lower than in the united states and the united kingdom but also below the euro - area average. as for specialized intermediaries, in 2005 total private - equity investment in italy was half the european average in proportion to gdp. the resources invested in italy go largely to buyouts. only 15 per cent of italian private - equity investment in 2005 went to venture - capital operations, compared with a european average of 27 per cent. and even of that, only a marginal portion