there was a decrease in domestic value added. this suggests some reshoring dynamics in the us and the opposite in europe. the fact that domestic value added has decreased in the eu may reflect our industry's muted competitiveness, which we will discuss later on. slide 6. chinese value added has increased in the eu and remains unchanged in the us our findings also highlight the challenges of decoupling or de - risking from china, due to the deeply integrated nature of global production networks. even though direct trade between china and the united states shows signs of a modest decline, the share of chinese value added in us manufacturing imports remained stable during the period examined. it appears that value chains are simply being re - routed through connector countries like mexico and vietnam. 3 / 6 bis - central bankers'speeches in the european union, chinese value added in manufacturing has in fact increased since 2018. while complete decoupling from china is virtually impossible, this clearly emphasizes the need for europe for a stronger de - risking strategy. while there is some evidence of shifting global trade flows, nearshoring and reshoring, there is currently no comprehensive indication that globalization is reversing. obviously, this may change, perhaps even relatively soon, if the incoming trump administration intends to keep its promises of significantly higher tariffs. in any case, the implications of these trends for growth, productivity and the monetary policy environment remain uncertain and warrant careful consideration. slide 7. monetary policy has been rather effective in reducing inflation geopolitical tensions are not only impacting global trade flows but also finance, and hence monetary policy. recent years have served as a testing ground for how a geopolitical polycrisis impacts inflation dynamics and the corresponding monetary policy responses. overall, the european central bank's monetary policy has been rather effective in bringing inflation under control. interest rate hikes in 2022 – 2023 were necessary in anchoring inflation expectations at the 2 % target level. while inflation has declined significantly and is now stabilizing to our target, the euro area has managed to sustain positive growth, and employment levels have remained robust. however, growth remains sluggish, and the economic outlook has deteriorated in recent months. given the current inflation and growth outlook, and considering that monetary policy remains restrictive, the trajectory for interest rates is clear : downward. the pace and scale of future rate cuts will depend on the ecb governing council's comprehensive assessment of three key factors : the headline inflation rate, the dynamics of

and well - educated population are some of the more obvious advantages. a highly educated labour force is able to attract high technology businesses to finland. however, well - educated finns may also be tempted to seek jobs outside finland. the logic underlying the development of a welfare state is changing. we can no longer presume that we first define the service goals and then adjust taxation accordingly to meet the resulting expenses. it is becoming increasingly clear that the logic is leading us in the opposite direction. the boundaries within which the services of a welfare state have to be accommodated are progressively more determined in two ways : externally on the basis of international competition among companies, and internally on the basis of employment, and through it, the financial base for public sector services. within these constantly narrowing boundaries the expenses caused by population ageing account for an ever - increasing share. finland must be able to compensate for the adverse impact of ageing on the labour force by making more efficient use of labour reserves. according to forecasts, finland ’ s employment rate seems to be settling at 68 % for a prolonged period. this is far from adequate. if employment remains at such a low rate, the entire financial base for the welfare state is certain to disintegrate. it is essential that the employment rate be raised significantly, and 75 % can only be regarded as the minimum objective. on the other hand, we need to take active measures to safeguard finland ’ s position in the competition over the location of companies. delayed action in this matter is but a waste of both time and opportunities. we need to respond to the threats affecting the competitive situation of companies before these threats cause permanent damage to our economy. a number of measures have been put forward to achieve these goals, including reforms in taxation, labour markets, social security, education and entrepreneurship. but, above all, what we also need is consensus on the implementation of these measures. maybe, over time, that too can be found.