indicators which, together with timely economic analysis, should help detect sufficiently in advance those situations of vulnerability that may endanger financial stability in the euro area and give form to the measures needed to correct them. progress in designing a permanent crisis - management mechanism has been considerable but clearly insufficient. first, temporarily, the european financial stability facility was introduced, and later, now on a permanent basis, the european stability mechanism was set up, which it is assumed should start operating next july. the complexities involved in the design of these devices are evident, since they must combine strength and flexibility to provide financial assistance to ailing countries, while ensuring that incentives are maintained to pursue the ambitious fiscal consolidation and structural reform programmes needed for laying the foundations for sustained growth in the medium term. bis central bankers ’ speeches but exiting the crisis will not be possible unless a stronger european governance framework is accompanied by a far - reaching revision of national economic policies, enabling them to be fully adapted to the conditions under which a monetary union can operate. it is imperative that the authorities and economic agents should fully assume the consequences derived from sharing a single monetary policy. the soundness of public finances and the flexibility of economic structures are vital requirements in this framework. taking a shorter - term perspective, the need to lower the high levels of public and private debt accumulated in the past makes improving competitiveness the key to restoring confidence and the growth of output and employment. with no possibility of currency devaluation, internal devaluation, i. e. the adjustment of prices and remuneration, along with productivity gains stemming from better work management, is the only alternative available in the immediate future to promote and restore lost competitiveness. almost 12 years back, angel rojo marked his departure from the banco de espana with his speech on the 1999 annual report. in a climate of exuberant optimism, he made a warning about credit growth which, he said, “ continues to rise at very high rates ”, the result being “ a heightening of demand pressure on trend output, with worrying effects ”. our problems now are not excess demand or a surfeit of credit, but how to correct these “ worrying effects ” rojo warned us about. let me close my address with his recommendations, as i am sure they will be of interest to you : “ under these conditions, the spanish economy needs to restrain the expansion of demand and increase the degree of flexibility in labour and product markets in order to sustain high, stable growth rates in the future

european project : a single currency, the euro ; and a single monetary policy, with its own institution, the european central bank. this is the epitome of cooperation among countries : a supranational agency that takes into account the well - being of the whole area instead of nations exercising their powers in a disorderly fashion. as a reward, the contribution of monetary policy to the economic stability of the union has been decisive, particularly during the sovereign debt crisis and, crucially, in the current health crisis. in addition to monetary policy, during this crisis, there has also been a genuine, common fiscal european response to the pandemic, notably including the creation of the next generation eu ( ngeu ) recovery fund. this fund adds key elements to ensure the burden of the economic recovery effort is shared. some are unprecedented, such as the large - scale issue of supranational european public debt to finance reforms and investment in those member states most affected by the pandemic. however, ngeu cannot and should not be seen as the cyclical stabilisation mechanism the euro area needs to complement our single monetary policy. a true macroeconomic stabilisation mechanism should be a multilateral institution in itself, of a permanent nature and with sufficient size, taxation power and borrowing ability. an additional important step that it´s still missing is related to the need to conclude the process of financial integration that was key to resolving the sovereign debt crisis. this is, namely, the banking union, through the agreement on a fully mutualised european deposit insurance scheme. it would contribute decisively to guaranteeing financial stability in the euro area and avoiding problems of financial fragmentation, both in the short and medium - term. in parallel, capital markets in europe remain relatively under - developed and under - integrated. hence the need to move resolutely 3 / 4 bis central bankers'speeches towards implementing all the measures that are necessary to create a true capital markets union. it was jean monnet who said that “ europe will be forged in crises, and will be the sum of the solutions adopted for those crises ". let´s do not waste the opportunity that this new crisis has offered to us. forging requires sufficient temperature to mould, but not so much as to melt. there has been much work on how to avoid reaching melting temperature in the last few years. now is the time to mould both the european project and the multilateral institutions. our aim is that, when