. the final judgment now rests on our being able to show that cohesion also produces growth and jobs. the second reason why a stronger role for the union could be beneficial is that, similar to fiscal policies, establishing rules at the level of the union may in fact help national authorities implement reform. structural reforms reach deep enough into societal arrangements and practices that they can only succeed if they are made the object of strong domestic ownership. at the same time, those reforms require substantial political capital. historical experience, for example of the imf, makes a convincing case that the discipline imposed by supranational bodies can make bis central bankers ’ speeches it easier to frame the debate on reforms at the national level. in particular, the debate can be framed not in terms of whether, but in terms of how reform needs to take place. in other words, i am not convinced by the argument that, in terms of structural reforms, there is an opposition between rules and ownership. on the contrary, they can be mutually reinforcing. conclusion in conclusion, there is a strong case for us to apply the same principles to the governance of structural reforms as we do to fiscal governance. the essential cohesion of the union depends on it. with the benefit of hindsight, it would have been useful to establish, alongside the existing convergence criteria, a set of structural criteria that had to be met to enter the euro area, and then respected once inside. but we have to start from where we are. thus, i would see merits in initiating, as a one - off, a new convergence process within the euro area – one which ensures that all countries are truly in a position to benefit from membership, and that none cause harm to another. today, national governments are not able to fully exercise their sovereignty alone, whether sovereignty is defined normatively, a la jean bodin, in terms of inalienable rights, such as to declare war and treat the conditions of the peace, to judge in last resort, to raise taxes and to mint money ; or whether it is defined positively, a la john locke, in terms of a fiduciary power to act for certain ends. individually, national governments are simply not powerful enough. to serve their purpose, they have to learn to govern together ; they have to learn to be sovereign together so as to respond to their citizens ’ needs. those needs today are growth and job creation. bis central bankers ’ speeches

michael c bonello : achieving sustainable growth after the recession speech by mr michael c bonello, governor of the central bank of malta, at the annual dinner of the institute of financial services – malta, saint julian ’ s, 27 november 2009. * * * i would first of all like to thank you, mr. president, and your council for inviting me once again to address your members and their guests. before i do so, however, i must commend the institute ’ s growing contribution to the financial services industry. an initiative deserving special mention is the foundation degree programme with the university of kent and the mcast. equally important for their role in bridging existing skills gaps are the seminars on specialized subjects such as fund administration and hedge funds. the institute ’ s joint initiative with a leading law firm to produce a series of books on “ maltese financial services laws ” should likewise satisfy a felt need in promoting a better understanding of financial legislation. finally, i would like to mention the institute ’ s cooperation with the european bank training network ( ebtn ), whose representatives are with us this evening. an improving external environment … at this time last year the global economy was entering a severe recession as a result of the shock waves transmitted from the financial markets after the collapse of lehman brothers in september. it was only the resolute and timely interventions by governments and central banks that prevented a repeat of the catastrophic consequences of a 1930s - style depression. the worst of the recession now thankfully appears to be behind us. financial conditions worldwide have improved. risk premia in money and credit markets have dropped to precrisis levels and equity markets have registered strong gains. although at a slow pace, growth has resumed, boosted by the strong performance of asian economies and a degree of stabilization in industrialized countries. the euro area economy, too, has been improving, and finally emerged from recession in the third quarter on the back of stronger external demand. a word of caution is warranted, however, because the experience of recessions that followed financial crises suggests that the recovery will only be gradual. both the imf and the european commission expect the world economy to expand by only about 3 per cent next year, compared with an average of 5 per cent in 2004 - 2007. 1 this expansion, moreover, is expected to be led by emerging economies, especially in asia, because growth in the industrialised economies is forecast to average below 2 per cent. the recovery in the euro area is similarly