and can contribute towards those already in employment becoming less interested in looking for a better - paid job. thus, even in an economic boom, employers can hold back wage increases without the risk of losing valuable labour. of course, these changes in wage formation may vary considerably in different economies. but they interact with each other due to the global 2 read more at : https : / / www. riksbank. se / sv / finansiell - stabilitet / det - finansiella - systemet / betalningar / 3 the risk of unemployment is one of many factors behind wage expectations. the experience of unpleasant mac - roeconomic events characterises the behaviour of different age categories, as discussed, for example, by malmendier and nagel in “ depression babies : do macroeconomic experiences affect risk taking? ” ( the quarterly journal of economics 2011 ) 3 market for goods and to a growing part of the service sector also being traded globally. the increase in the number of self - employed people, the many part - time positions and the changed wage composition are factors that tend to crop up as explanations for low wage growth in other economies but which i consider to be less important for understanding wage formation in sweden. on the other hand, what is special for sweden is that we have become many more on the labour market. the number of persons between 15 and 74 in the labour force increased by just over half a million between 2006 and 2016. this increase is largely due to high immigration but the labour force is also growing due to changed rules and reforms on the labour market and to tax, benefits and pension rules. 4 a higher labour supply leads to greater competition for vacant jobs, thus restraining the rate of wage increases. my assessment is that there are overarching cyclical forces that suggest wages will rise during the forecast period, but that the rate of increase may remain low despite the high level of resource utilisation. when the effect on the economy from upheavals such as technological advances, demographic changes or increased cross - border trade has worn off, employees should be able to increase their pay again. however, this can take time and, during the transition, the best contribution monetary policy can make is to facilitate, via high resource utilisation and as far as is compatible with the inflation target, the various adjustments demanded by structural transformation and demographics. education and oversight of competition – to meet the future however, if sweden as a country is to be able

of “ relevant factors ” ( including cyclical developments to some public investments or state aid measures for the financial sector ), that can be invoked in the assessment of compliance with the deficit and debt criteria. this could create further room for unwarranted discretionary decisions and may open the door to lax fiscal policies at a time of much needed fiscal consolidation. as regards macroeconomic surveillance, we have often emphasised that, in order to be effective, it should have a clear focus on a restricted number of indicators capturing macroeconomic imbalances per se. this procedure is specifically targeted at macroeconomic imbalances, meaning extreme and persistent divergences from a sustainable trend that threaten the proper functioning of monetary union. it is not about achieving higher growth potential which is of course highly desirable and is the goal of the eu 2020 strategy. this does not imply that i do not recognise the need to co - ordinate all the dimensions of economic policy under the umbrella of the european semester. overall, the reports approved by your committee are a positive contribution for the trialogue that follows and that, i hope, can be successfully finalised so that the economic governance package can be adopted and implemented as soon as possible. conclusion madam chair, honourable members, the lessons of the financial crisis for europe are responsible for the vast programme of reforms that we have been implementing. last year, focused in the euro area, the crisis highlighted the interplay between the sovereign debt problems and the financial sector, since they represent two faces of the same crisis. weak financial sector can have an adverse impact on public finances, while deficient fiscal policies and macro imbalances can have negative repercussions on the financial sector. resolving both problems will put the euro area on a track of renewed sustainable growth, leaving this crisis behind us. this requires the implementation of effective economic governance that can ensure fiscal sustainability, bis central bankers ’ speeches competitiveness and growth, the completion of the permanent european stability mechanism and the efficient functioning of the new european system of financial supervision. in all these endeavours, the european parliament and the ecb share common values and goals and will, i am sure, continue to collaborate in order to ensure the success of europe. thank you for your attention. bis central bankers ’ speeches