the current economic “ good times ” should be used to rapidly redress the remaining budgetary imbalances in euro area countries as well as to accelerate the adjustment towards their medium - term objectives of sound budget positions with a focus on expenditure restraint. as agreed by the euro area finance ministers at the eurogroup meeting in berlin on 20 april, taking advantage of the favourable cyclical conditions would enable most euro area members to achieve their medium - term objectives in 2008 or 2009, and all of them should aim for 2010 at the latest. this is particularly important with a view to reducing the still high government debt ratios and preparing for the fiscal challenges arising from population ageing. in order to ensure that fiscal developments are monitored effectively, the governing council supports all efforts by eurostat to improve the fiscal data situation. it also welcomes the increased emphasis placed by the ecofin council on measures to improve the quality of public finances and increase the efficiency of public administration. as regards structural reforms, the governing council fully supports any efforts that enhance competition, increase productivity and foster economic flexibility, thus promoting higher sustainable real gdp growth and employment. in this respect, we strongly back reforms focusing on reducing labour market rigidities, product market barriers and administrative burdens, and on stimulating technological innovation. exploiting the complementary nature of reforms would increase their benefits in terms of long - term economic dynamism and price stability. furthermore, the importance of a successful conclusion of the doha round of trade talks for productivity and growth in europe should not be underestimated. in the end, higher productivity growth will allow increases in real wages without negatively affecting employment, thereby supporting the income growth of the euro area workforce. we are now at your disposal for questions.

be continued if and only if a programme was in place that would ensure the solvency of the banks concerned. after the eurogroup agreement on 25 march, the ecb did not object to the request for the provision of ela by the central bank of cyprus. on both occasions, the ecb acted strictly in line with its statute. it implemented the existing rules. nothing more, nothing less. the finally agreed eu / imf programme reflects the three objectives i mentioned earlier. in particular, it was decided to cover the capital needs of the two largest banks exclusively through the own contributions of uninsured depositors and senior and junior debt holders. the creditors of the two banks would not be made worse - off than they would have been in the case of liquidation, which would have been the alternative to the programme. this is necessary to guarantee the sustainability of public debt. it will also contribute to restoring the conditions for sustainable and balanced growth. in addition, the eu / imf programme foresees a rapid and substantial downsizing of the domestic banking sector, from about 550 % to about 350 % of gdp at the beginning of the programme. this is indispensable to reduce future contingent liabilities from the banks to the sovereign. the eu / imf programme also foresees the full protection of deposits below 100, 000 euros which will not suffer any loss from the resolution strategy. despite the unprecedented steps taken so far, the banking sector has not yet been stabilised. the burden sharing arrangement negatively affected depositor confidence and required the introduction of temporary and proportionate capital controls and restrictions on deposit withdrawals. short term risks are high, as the deep recession is expected to take a toll on banks ’ balance sheets. the reliance of the largest bank on ela continues to be exceptionally high. hence, firm steps are needed to complete the financial sector reform so as to rebuild confidence in the viability of the banking system. bis central bankers ’ speeches let me now turn to the lessons which we can draw from the experience in cyprus. lessons from the cypriot experience the cypriot case has been a salutary reminder of the importance of establishing banking union as swiftly as possible. only then we will be able to break the negative interaction between sovereigns and their banking systems. first, it has shown that the speedy entry into force and implementation of the single supervisory mechanism ( ssm ) is essential. the centralisation of supervision as well as the effective use of macroprudential tools should help