financial regulation, for example. second, we should not forget that, despite the significant progress made in deleveraging in recent years, our level of debt is still high. moreover, the progress made in reducing the level of debt has not been uniform. while general government debt is still close to its recent high levels ( on which i will have more to say later ), private sector deleveraging has been very significant. 4 / 8 in any event, the net external debt of the economy as a whole remains very high. reducing this debt will require running persistent external surpluses, which would be difficult in a setting of contracting international trade or rising interest rates. insofar as maintaining balanced economic growth is concerned, the low profitability of spanish deposit institutions is certainly a problem. this phenomenon, also observed in other european banking systems, is related to the pressure that the low interest rate environment exerts on the net interest margin, but also to the still - high level of unproductive assets, limited turnover and the competitive environment, in which a growing number of institutions from outside the financial sector are increasingly active in offering services traditionally provided by banks. challenges for sustained economic growth in spain in the long term taking into account these short and medium - term prospects, i will now refer to the challenges facing the spanish economy in the longer term. our report refers to four priorities : combating the effects of population ageing, tackling long - term unemployment, increasing productivity growth and reducing public debt. the consequences of population ageing as in other european countries, we are witnessing a process of strong population ageing, a phenomenon with profound implications in various areas. this development, which has been under way for several decades already, has accelerated as a result of the impact of the crisis on births and migratory flows. people over the age of 65, who in 1970 made up less than 10 % of the population, currently account for 21 % and, according to ine projections, will represent more than a quarter of the spanish population within 15 years. currently, two types of adverse effects of this phenomenon on economic growth can be identified. first, population ageing is leading to a reduction in the number of persons prepared to work or seek employment. second, indirect negative effects of population ageing on productivity, saving and investment decisions and innovation can be identified. as a result, ageing poses enormous challenges for fiscal policy, since a smaller labour force, that is possibly on average less productive, will have

i need not stress that these movements are negative for our recovery prospects and, in general, for an economy such as spain that is increasingly integrated into the global framework and which in recent years has notably improved its competitive capacity abroad. the united kingdom ’ s departure from the european union is, in my view, a negative phenomenon, although the results in recent european elections appear to indicate a brake on or at least a re - drawing of the lines marking these trends. in any event, in the euro area – where our economy operates – it will be very important to maintain the goals of integration into the financial and banking area and to address the capital markets union project. but it is important, too, that the achievement of a true economic union may go beyond the financial realm. along these lines, our annual report refers to the discussion of possible ways forward towards a fiscal policy that includes common stabilisation elements within the euro area, in a setting, such as the present, in which the high levels of public debt restrict the budgetary room for manoeuvre in a good number of countries. progress here would contribute to equipping fiscal policies within the area with greater strength and, therefore, to minimising the potential adverse repercussions – economic and social alike – of future crises. thank you for your attention. 8 / 8