blueprint for emu, the report of the delors committee. the maastricht treaty made the institutional reform obligatory for all eu central banks. many other countries outside the eu, and outside the european continent, have implemented similar institutional reforms. this proves that such a reform has been judged to serve the national interest in a wide variety of countries. the central banks of those countries have in most cases been successful in meeting their inflation targets, which has contributed to monetary stability worldwide. central bank independence and accountability alone are not a sufficient guarantee of the happy coexistence of price stability and sustainable growth. in addition, we need fiscal restraint to prevent a widening of public deficits so that they put upward pressure on real long - term interest rates and crowd out private spending. in the worst case, they could ultimately lead to the removal of central bank independence, with central banks being forced to rescue governments. that would signal the end of monetary and price stability. economic performance while inflation performance since the start of emu has been satisfactory – excluding recent months – we have no reason to be happy with growth performance. economic growth in the euro area since the launch of the euro has averaged 2. 1 %, compared with 2. 6 % growth in the united states and 2. 7 % on average in the three nonparticipating member states : denmark, sweden and the uk. labour productivity growth has been very modest, at 0. 8 %, which is only half the average productivity growth in the abovementioned benchmark countries. growth performance employment growth gdp growth productivity growth suomen pankki | finlands bank | bank of finland but we must admit that employment growth in the euro area has been impressive. since the launch of the euro, 16 million new jobs have been created in the area, compared with 13 million new jobs in the united states in the same period. unemployment has come down from a peak of 11 % in the mid - 1990s to 7 % today. this strong labour market performance tells us that labour market reforms – where such reforms have been introduced – have brought about the desired results. these reforms have contributed to a rise in employment among less - skilled workers, which partly explains the slow rate of labour productivity growth. despite the improvement, the situation on the labour market is far from satisfactory. employment rates are low compared with the us or, for example, the nordic countries. these observations could, however, be turned into a more positive story. a low employment ratio

economies themselves. similarly, the banking union will not directly limit the share of banks ’ assets tied to sovereign debt. placing strict limits to banks ’ sovereign holdings would rather be a separate regulatory matter and would warrant careful, longer - term deliberations. that said, the comprehensive assessment should enhance confidence in the european banking sector and add impetus to banks ’ efforts to improve their capital adequacy. in this respect, much has already been achieved in the run - up to the exercise. the improved confidence, in turn, promotes provision of healthy credit to the economy and thereby contributes to europe ’ s recovery prospects. • from a longer - term perspective, the banking union will help us prevent and at least mitigate potential distortions and their destabilizing effects on the european financial markets. the ssm will be a key element in addressing banking sector risks before they materialize and, like the ecb in the area of monetary policy, lend credibility to national banking supervision by conducting it with a supranational bis central bankers ’ speeches perspective. i argue that this is a fundamental change in the culture of how european supervision and resolution are conducted. we move from national efforts to prop up domestic banks to appropriate pan - european supervision, i. e. to a system where the structure of decision making matches the international character of the banks and markets. the change does not only include the improved supranational banking supervision, but also other elements. the ssm will be complemented by the bank recovery and resolution directive ( brrd ) and the single resolution mechanism ( srm ). the new legal framework will allow early intervention in troubled banks. it will also make possible the bail - in of banks ’ shareholders, and so creditors help to dissolve the expectation that banks ’ resolution costs would fall on the tax payers. this new resolution regime is backed up by the cross - border risk - sharing via the single resolution fund, which will be financed by the banking industry itself. all this will alleviate concentration of the ultimate liability for troubled banks on any single sovereign. as an important result, the arrangements could decouple the banking industry from the fiscal condition of the sovereigns concerned. why does all this matter for the central banks? financial stability and the central banks ’ key objective of price stability are obviously connected, both directly and indirectly through the real economy. but a stable financial system also fosters greater integration of the financial markets. and the more integrated the financial markets are in the