those regarding the labour market and pensions. well, those are, after all, two extremely central policy areas, and it is not least thanks to these reforms that our economy is doing so well compared with other countries. but that is precisely what makes it tempting to avoid tackling still - existing deficits. unfortunately, reforms are often not carried out when the need for action is still predictable but only after all other options have vanished. the costs are then usually higher. in the light of the good situation, many see your criticism as the typical attitude of a bundesbank killjoy. former federal reserve chairman william mcchesney martin once remarked that the central bank ’ s job was “ to take away the punch bowl just as the party gets going ”. as an independent central bank, it is also our role to voice unpleasant findings. you were the chancellor ’ s economic adviser for five years. we would now like to give you the opportunity to list all the reforms of the past two legislative periods. bis central bankers ’ speeches there are quite a few … we are sitting on tenterhooks. federal structure reform and the introduction of the debt brake, corporate tax reform – with some caveats – and, for instance, also the stabilisation of pension insurance through, amongst other things, the increase in the retirement age... giant leaps forward look different. that doesn ’ t mean, though, that retirement at 67 is not important. the agenda 2010 reform programme was also controversial in its day. today we are reaping the dividends – unemployment is lower, employment, including among older workers, is higher, and the social security scheme is in better shape financially. another point is also important, though : in 2013 germany will have a balanced government budget for the second consecutive year. unlike in the past, windfall revenues and underspending have been used, at least in large part, to cut deficits. however, there are still many unresolved problems. for example? we have to ask ourselves again and again where our place in the global economy is going to be. how can we preserve our prosperity in a globalised world? how do firms remain innovative, flexible and thus competitive? how do we deal with demographic change and its implications for the labour market? where will affordable energy come from? or think of the debt level, which, at more than 80 % of gross domestic product, is too high. and could continue to rise, judging by the pre

is expected to be the driving force of global growth, the real gdp growth rate for the january - march quarter has decelerated considerably, due in part to effects of adverse weather conditions. nevertheless, the economy continued its robust recovery trend supported by household spending – as seen in private consumption rebounding from a fall in winter – against the background of the favorable employment and income situation in particular. the u. s. economy is expected to continue to see growth led mainly by private demand, starting from firm household spending. in addition, the european economy, in which the momentum for recovery had been weak, has recently been seeing a clear increase in private consumption, reflecting the effects of the decline in crude oil prices and of a rise in stock prices. it also has been seeing a pick - up in business sentiment and production activity resulting from an bis central bankers ’ speeches improvement in exports and corporate results due to the depreciation of the euro. going forward, the european economy is expected to continue to see moderate recovery with the permeation of the effects of depreciation of the euro and those of the monetary easing measures by the european central bank ( ecb ). meanwhile, turning to emerging economies, the growth momentum of the chinese economy has been sluggish against the backdrop of the deceleration in fixed asset investment and continued inventory adjustments. nevertheless, it is likely to follow a generally stable growth path as there are likely to be effects of the authorities ’ policy measures to support economic activity, although the pace of growth is expected to be somewhat reduced. other emerging economies and commodityexporting economies have continued to lack momentum on the whole, but are expected to gradually increase their growth rates, mainly as the recovery in advanced economies spreads to them. in sum, the global economy – mainly advanced economies – is expected to continue recovering moderately, and against this backdrop, japan ’ s exports are expected to increase moderately. of course, various uncertainties – including the pace of growth in the u. s. economy, the prospects regarding the european debt problem, including developments in greece, developments in the emerging and commodity - exporting economies, and geopolitical risks – continue to call for close attention. in a situation where exports have been picking up and, as i will explain later, private consumption has been resilient, production has been picking up. corporate profits have increased to historical highs and business sentiment has generally stayed at a favorable level ( chart 3 ). under these circumstances, with regard