be abundant, although the monetary policies of the leading countries have been less accommodating for some time. the world economy continues to grow at a rapid pace. it is unrealistic to expect that today ’ s orderly market conditions will last forever. this is why there has been a call from many quarters for closer international collaboration, not only in order to take steps towards gradually overcoming global imbalances, but above all to strengthen the world financial structure. we do not know where the next crisis will come from but we must do everything in our power to be ready for it. we also need to shun policies that could generate financial instability and cause growth to slow. in particular, we must resist protectionist pressures, such as the measures to obstruct international trade with the emerging asian economies advocated on many sides. the italian economy : an opportunity for restructuring and revival the italian economy continues to benefit from the favourable european and world cycle, although it is growing at a slower pace than the average for europe. it is estimated that in 2006 output expanded by slightly less than 2 per cent. the improvement in the economic situation compared with previous years is undeniable. but it is not sufficient : the growth achieved so far mainly thanks to the favourable performance of the european economies, and of germany ’ s in particular, must be progressively replaced by domestic expansion. if this is to happen a process of strong and lasting growth in total factor productivity, which has stagnated since the middle of the 1990s, must be set in motion. the material and above all human resources, especially young people, that the country possesses in abundance must be brought into play. positive signs are already visible, mainly among the firms most exposed to international competition, but it is still difficult to distinguish with certainty between the effect of structural changes and that of the factors usually observed during cyclical upturns. many national labour contracts have now expired or will do so by the end of this year. hopefully, action by the social partners will lead to an upturn in productivity and growth in employment. one of the first rounds of negotiations, which will evidently have implications for the rest, is for the renewal of the contract governing the public sector, where increases in per capita earnings in recent years have far outpaced those in the private sector without explicit or adequate consideration for the real performance of productivity. personnel management in the public sector is subject to strict constraints, incentives are few and the independence and accountability of managers are often insufficient

. the first phase of the examination of the quality of banks ’ assets, devoted to the selection of riskier portfolios, is drawing to a close. in the second phase, which will get under way in the coming weeks, a large number of credit files will be analyzed and the adequacy of the value adjustments in banks ’ accounts will be assessed. in the last few days the european banking authority and the ecb have announced the main features of the stress test. the exercise will refer to the three years 2014 – 16. the threshold value of the capital ratio that banks must comply with at the end of the period is 8 per cent in the baseline scenario and 5. 5 per cent in the adverse one. the definition of capital, which will take due account of the choices made by national authorities, in line with the provisions of the transitional regime, will be that in force at the end of 2016. the corrective measures that intermediaries will be asked to take will be related to the nature of the capital weaknesses revealed by the stress test. if they emerge in the baseline scenario, banks will be asked to implement the necessary measures rapidly ; if, instead, they only appear in the adverse scenario, the time frame will be determined appropriately as part of a recapitalization plan agreed with the supervisory authorities. in recent months i have already drawn attention to the need for a rapid definition of public backstop mechanisms, capable of reassuring the markets about the authorities ’ determination to tackle and overcome any weaknesses that should emerge from the assessment exercise. the design of the banking union must be completed with the introduction of the single resolution mechanism for failed banks. the negotiations under way between the council, the commission and the european parliament on the agreement reached by the council at the end of last year must move forward and be concluded rapidly, so as to allow the responsibilities of supervision to be aligned with those of the management and resolution of crises as soon as possible. the decision - making process must be speeded up and made more effective. the long transitional period envisaged before the resolution bis central bankers ’ speeches fund becomes fully effective must be shortened, so as to make the overall mechanism entirely credible. in order to return to rapid, sustained economic growth it is not enough to eliminate the factors of risk that i have recalled – to counter excessive disinflation, ensure the credibility of fiscal consolidation and stimulate renewed lending. italy has still not risen properly to the challenges of technological innovation and the globalization of