potential economic growth rate of the euro area is set to decline. in order to support the potential economic growth of the euro area, to foster macroeconomic flexibility and dynamism, and to safeguard the future standard of living of our citizens, labour and product market reforms are urgently needed. this will increase labour market participation and employment, foster an attractive environment for investment and innovation, help to promote flexibility in wages and prices and strengthen all the other forces driving productivity and economic growth. the ecb will play its part by continuing to gear its monetary policy decisions in an unambiguous manner towards the maintenance of price stability. diverging competitiveness developments in the euro area while pursuing the aforementioned structural reforms is essential to maintain the competitiveness of the euro area as a whole and to translate the opportunities brought about by globalisation into achievements, there is also a need to address deviating trends in competitiveness within the euro area. competitiveness is commonly understood as the ability of a country to compete in international markets. this ability is usually assessed on the basis of various measures of cost and price competitiveness and complemented by accounting for “ non - price ” factors, such as the quality and the technology content of the goods produced, the ability to diversify and innovate quickly, the reliability of the servicing network. ideally, one should look at all these measures to fully understand the direction in which a country is moving. however, i will limit my considerations to relative developments in cost and price developments across euro area countries. the analysis of cost and price competitiveness across a wide range of indicators suggests that euro area countries have experienced rather diverse competitiveness trends since the start of the emu. persistent losses in cost and price competitiveness – if those are not offset by corresponding improvements in non - price competitiveness – are sooner or later paid in terms of output losses, rising unemployment and increasing current account deficits. these losses in cost and price competitiveness mainly originate from a lack of flexibility in labour and product markets and reflect the need to improve the adjustment capacity of the economies concerned. indeed, structural rigidities – and in particular distortions in the wage and price formation mechanism – hinder a proper working of the competitiveness adjustment mechanism across the euro area countries. let me stress further this point. by looking behind unit labour costs developments in the countries where they have been rising persistently, it appears that these losses mainly reflect a slowdown in labour productivity growth and a failure to keep wage growth in line with

##ence and deliver significant fiscal and foreign exchange savings. achieving the target requires around 1. 3 billion dollars to upgrade power infrastructure, of which only 13 % has been pledged by donors so far. small island developing states ( sids ) like the maldives call on international financial 1 / 3 bis - central bankers'speeches institutions to provide easier and affordable climate finance for adaptation and mitigation on the principles of a just energy transition. while the imf's resilience and sustainability fund and the world bank's record 42. 6 billion dollars in fiscal year 2024 in climate finance are commendable. more is needed, especially for climate vulnerable sids. additionally, we must innovatively rethink and implement strategies to mobilize private sector investments. secondly, debt sustainability. over two - thirds of emerging markets and developing economies are at high risk of debt distress. while the global sovereign debt roundtable has encouraged collaboration, more action is needed. debt sustainability analysis must better account for country context, and the ongoing review of the debt sustainability framework for low - income countries should look at the specific needs of sids. the imf, world bank, and mdbs should take bold steps to support countries in debt distress. mdbs can also create tools like debt - for - climate swaps, exchanging debt relief for climate adaptation investments. finally, structural reforms. we must strengthen the productive and state capacities of emerging and developing economies. the bretton woods institutions should focus more on job creation, equal opportunities, economic diversification, and the impact of refugee flows. similarly, structural reforms must be socially acceptable, ensuring benefits are widely shared. over the past year, the imf and world bank have undertaken significant initiatives to support our members. the completion of the 16th general review of quotas, the ida21 replenishment, and discussions on quota realignment and strengthening world bank group's financing will help ensure that these institutions remain adequately resourced. at the same time, let us not lose sight of the importance of providing adequate access and representation to the countries which need mdb support the most, as well as ensuring evenhanded treatment across the membership. the review of the imf's poverty reduction and growth trust, charges and surcharge policy together with the world bank's ida21 replenishment demonstrate support for our most vulnerable nations. as i reflect on the discussions i have had during these annual meetings, one theme has emerged strongly : the critical need for multi