grounds that it does not comply with the principle of individual fiscal responsibility that underpins the maastricht treaty. the main reason for germany ’ s sluggish potential growth is its declining workforce. if we could travel by time machine to the year 2060, we would arrive in a country in which considerably fewer people live and the share of old people is significantly higher. according to the federal statistical office ’ s coordinated population projection, one - third of germany ’ s population will be over 65 in 2060. the implications for economic output are clear. the working - age population will shrink and the total number of hours that can be worked will decrease. this will dampen aggregate output. and in the longer term, demographic change could also have an adverse impact on overall productivity, for example as a result of the rising fiscal costs of the ageing population and a potential drop in innovation. this will also depress per capita income. the three main factors through which these dampening macroeconomic effects might be countered are 1. the number of women in work, 2. the length of the working life and 3. the immigration of skilled workers from abroad. although female labour market participation in germany is well above the oecd average, the share of women in full - time employment is clearly below the average for industrial countries. to raise the number of women in work, germany needs to further reconcile work and family life. key improvements have been made over the last few years, notably by providing more extensive day care for small children and offering more all - day school facilities. not only the state but many enterprises, too, have come to realise that young, well - qualified women return to work more quickly after the birth of a child if they find good day care services for their children. these enterprises have invested in in - house day care centres for this very reason. however, some aspects of germany ’ s tax, social security and transfer system create less of an incentive to seek gainful employment. non - contributory inclusion in the statutory health insurance scheme and the childcare supplement are two such examples. the political bis central bankers ’ speeches objectives behind these instruments need to be weighed against the effects they have on employment. moreover, as life expectancy increases, so the statutory retirement age needs to be raised to curb the effects on the pension level as well as non - wage labour costs. this question has been addressed with the progressive increase of the standard retirement age to 67. what we need is a longer

safeguarding the stability of the financial system in the euro area. five euro - area member states were able to count on help from the other member states, provided in the spirit of solidarity, and take out assistance loans in order to gain the time needed to get to the root of their problems. and fourth, as already mentioned, a banking union was resolved, establishing a single supervisory mechanism under the aegis of the ecb and a single resolution mechanism for ailing banks. the measures i have just mentioned have made the monetary union more stable in the long term and, in some cases, have also played a part in preventing the crisis from escalating. however, this very bailout policy pursued by the member states and the eurosystem has brought about a precarious situation : elements of mutual liability were essentially introduced for the crisis - hit countries ’ debt, while fiscal policy remains a matter for national policymakers. that doesn ’ t augur well for the future. bis central bankers ’ speeches liability is a core element of our economic system. that ’ s something every entrepreneur knows – after all, doing business means picking up the tab if things go wrong. there are essentially two ways of putting control and liability back on a more even keel. either the monetary union is developed into a fiscal union with centralised rights to intervene in fiscal policy at the european level. this would also enable greater mutual liability. or we turn back to the original framework as specified in the maastricht treaty and reinforce the principle of individual national responsibility. which path is the right one to take is a matter for policymakers to decide. i believe that governments and the public at large are currently less than willing to take the step towards a bona fide fiscal union, seeing as this would mean ceding a great deal of national sovereign rights in fiscal policy matters. ladies and gentlemen, it was a long - held belief, above all in germany, that in the long run monetary union would, out of necessity as it were, culminate in political union. addressing the bundestag in november 1991, helmut kohl remarked that “ the idea of sustaining economic and monetary union over time without political union is a fallacy ”. i believe, however, that monetary union can also function without political union. the maastricht framework, which was adjusted in the light of the crisis, offers a sensible foundation for this in principle. the precondition, however, is that the agreed rules are also