. are these fights damaging the ecb? i wouldn ’ t say they are damaging it, but certainly they are not contributing to the effectiveness of the policies. criticism of draghi is intensifying in the north of europe. are you fearful of disengagement from the european project in countries such as germany? we have to redouble our communication efforts. the ecb has delivered low inflation and a favourable environment in which germany has enjoyed ten years of strong growth. germany has been much better off with the euro. in september the votes against came from countries that together account for more than half of the eurozone ’ s population. i don ’ t represent spain on the executive board. you have to act with the entire eurozone in mind. the “ one member, one vote ” system, as occurs in the governing council, is especially democratic as it avoids imbalances in the decision - making process. but we clearly have to consider germany. if the german economy grinds to a halt, we will all be affected. we ’ re all in the same boat. could ms lagarde ’ s arrival ease some of these tensions? i don ’ t think there will be a sudden change in policy by any means. i ’ m confident that everyone on the governing council will work together with christine lagarde with unwavering loyalty from the outset. the ecb has just lowered its growth forecasts, but some people think they are still too 2 / 3 bis central bankers'speeches optimistic. the slowdown is coming from the external sector, which has a strong impact on countries like germany. if it does fall into recession, it will be a technical recession and the economy will rebound quickly. the risk is not so much one of recession, but rather of entering a prolonged period of very moderate growth, below 1. 5 %. this is why players other than the ecb have to get involved. is the euro area prepared for a no - deal brexit? the financial sector is, yes. but the main impact will not come from the financial sector ; it will come from the overall impact on the united kingdom, which is the second - largest european economy. contingency plans are in place in the financial sector, but other sectors are not as well prepared. the spanish economy is also starting to be a concern. spain has enjoyed above - average growth since 2013, but nobody can escape the global slowdown. that said, the spanish economy can steer

the right structural policies. for example, we have seen participation rates of older workers grow strongly during the crisis, due in part to pension reforms adopted in many euro area countries. still, despite this untapped reserve for accelerating employment growth, we cannot avoid the fact that, over time, the inherent speed limits resulting from the euro area ’ s unfavourable demographics will start to bite. the euro area ’ s working age population is projected to start gradually decreasing in the next decade. in that context, employment growth is likely to start decelerating in the not - too - distant future, even with determined structural reforms, as a higher share of people in work will no longer be able to offset the fall in working age population. even higher expected migration is unlikely to be able to fully offset this natural population decline. public policy can certainly help temper these effects through its role in receiving and integrating migrants. but since policy cannot do much to alter long run demographic trends, the implication is that raising long - term growth will require a complement – namely, raising productivity. raising productivity is difficult. it requires a broader set of reforms, and those reforms typically encounter greater resistance from vested interests. that is why many countries have found it easier to reform the labour market than other areas during the crisis, and indeed repeated attempts since the turn of century to make the europe “ the most competitive and dynamic knowledge - based economy in the world ” have produced only meagre results. [ 17 ] given the weak outlook for euro area growth, however, tackling the productivity challenge can no longer be delayed. broadly speaking, productivity growth comes through two channels. the first is within - firm growth, which depends on the generation and diffusion of new innovations and management techniques. the second is across - firm growth, which depends on the movement of resources from the least to the most productive firms. the euro area ’ s comparatively weak performance derives from both. indicators on research and development suggest that the euro area is lagging behind in terms of innovative capacity, and particularly in the services sector. indeed, the diffusion of information and communication technology appears to have contributed much less to services productivity growth than in the us, and this accounts for much of the weaker productivity performance of the euro area since the mid - 1990s. at the same time, employment in euro area is undergoing a secular shift from manufacturing to services, and this has only been exacerbated by the patterns of job creation since the crisis. [ 19 ] such