peter praet : the outlook for reform - cementing growth and delivering sustainable employment speech by mr peter praet, member of the executive board of the european central bank, at the ludwig erhard lecture, organised by the lisbon council, brussels, 30 november 2017. * * * accompanying slides the solid and broad - based economic recovery in the euro area is continuing1. we have now seen 18 quarters of positive growth and the short - term economic indicators all point to a continued economic upswing with above - trend growth. the breadth of the expansion is notable. the dispersion of growth rates across both countries and sectors is at its lowest level for two decades, reflecting a convergence of growth rates around higher levels. this is reassuring for the growth outlook because recoveries tend to be firmer and more robust when they are broad - based. progress in the euro area recovery has been mostly home - grown, with a virtuous cycle increasingly taking hold between rising income and spending in both the corporate and the household sector. an important driver behind the good performance of domestic demand is the very favourable financing conditions for firms and households, which are heavily contingent on our policy measures. however, the positive developments also reflect the pay - off from years of balance sheet repair, institution - building – at both national and union level – and structural reforms. in the banking sector, enhanced regulation and supervision have steered the sector towards safer business models and stronger capital profiles. euro area banks have shored up their capital positions with average common equity tier 1 capital ( cet1 ) having increased from 7 % in 2007 to 14. 1 % at present. banks have also disposed of non - core assets, reduced their exposure to market risk and generally refocused their activities on more traditional business models. these measures imply that banks are today in a much better position to intermediate between those who save and those who want to invest, thereby supporting the recovery. banking sector repair has also been helped by structural reforms. a number of euro area countries have, for instance, enhanced the effectiveness of their insolvency regimes. in corporate debt restructuring, experience to date shows that an effective insolvency regime is critical to facilitate the early rescue of viable firms and the speedy exit of non - viable ones. internal ecb analysis has confirmed that eu countries with better insolvency frameworks deleverage faster and are able to adjust their non - performing loans more rapidly than countries with weaker regimes. in turn, this

the other hand, 2 / 3 bis central bankers'speeches that means that any new integration steps involve a political process that must be approved by 27 governments, subject to local and national political interests. that involves slowness and procrastination, but the result is robust. even after the crisis we have lived through, which has deeply scarred our economic and social fabric, the level of public support for the euro is at its highest in 20 years. that should be the basis for further progress. 3 / 3 bis central bankers'speeches