activity. however, in order to increase investment activity, boost job creation and raise productivity growth, other policy areas need to contribute decisively. in particular, the determined implementation of product and labour market reforms as well as actions to improve the business environment for firms needs to gain momentum in several countries. it is crucial that structural reforms be implemented swiftly, credibly and effectively as this will not only increase the future sustainable growth of the euro area, but will also raise expectations of higher incomes and encourage firms to increase investment today and bring forward the economic recovery. fiscal policies should support the economic recovery, while ensuring debt sustainability in compliance with the stability and growth pact, which remains the anchor for confidence. all countries should use the available scope for a more growth - friendly composition of fiscal policies. we are now at your disposal for questions. bis central bankers ’ speeches

philip r lane : stabilising the economic outlook remarks by mr philip r lane, member of the executive board of the european central bank, at “ the outlook for the economy and finance ” workshop ( fully digital ), organised by the european house – ambrosetti, frankfurt am main, 27 march 2021. * * * the theme of this panel is the “ competitiveness of europe and of the european financial markets ”. although the near - term focus of everyone is predominantly on combating the pandemic, it is also necessary and appropriate for us to examine the longer - term determinants of income levels and living standards. let me emphasise that shorter - term and longer - term economic performance are inextricably linked, especially in the current circumstances. in particular, a sustained period of below - capacity economic activity damages the longer - term productive capacity of the economy through several mechanisms. first, inactivity hurts labour productivity through the loss of on - the - job knowledge accumulation. and for those entering the workforce straight from school or university, the damage has been compounded by the adverse impact of the pandemic on educational systems over the last year. second, the sustained loss of revenues in those sectors most affected by social restrictions has weakened corporate balance sheets. since the financial health of firms is an important determinant of investment, the long - run level of productivity is threatened by a reduction in capital accumulation. and firm - specific knowledge capital may be lost if the revenue shortfall during the pandemic results in the closure of otherwise viable firms. third, the pandemic is also an uncertainty shock. not only is there uncertainty about the timing of the exit from the pandemic – due to the opposing forces of vaccinations, other medical treatments and social restrictions on the one side, versus the spread of the virus and the emergence of mutations on the other side ; but there is also a lively debate about the implications of the pandemic for the future of various sectors. in particular, the future balance between the office and the home as a workplace, as well as the option to work remotely from any corner of the world, has widespread implications for many sectors. it is also plausible that the accumulated experience with online meeting and collaboration technologies will reshape how international activities are organised, including a decline in the scale of business travel. while a substantial proportion of this uncertainty is inescapable, there is a clear risk of selffulfilling adverse dynamics