in banking, where they are very rare ( notwithstanding unicredit - hvb ). the aim in the end is to create jobs. unemployment at this level is unacceptable. one in four young people in europe are out of a job. as structural reforms take time, we need to resort to active labour market policies, like vocational training. otherwise, we risk a lost generation. bis central bankers ’ speeches the little growth there is comes from exports. german and italian companies meeting in bolzano this week raised the question of the strength of the euro. our answer does not change. we don ’ t have an explicit exchange rate target. the exchange rate is factored into our inflation and growth forecasts. but is it too high, is it overvalued, does it worry you? a in nominal terms and in real effective terms, which is more important, it is within the band we have seen for the last ten years. i don ’ t have any specific worry on the exchange rate. it only concerns me as it factors into our inflation forecast. you are directly involved in the negotiations on the banking union. single supervision was agreed, but on single resolution there are still wide differences. time is running short, because of the end of the legislative term of the european parliament in the middle of next year and the uncertainty in germany about the next government coalition, which will delay decisions. we want a banking union with all its elements, which includes a single resolution mechanism with its three components : a european resolution regime, a european resolution fund and a european resolution authority. and we want it in place close to the time single supervision starts in november next year. it is ambitious but doable. the european parliament will stop working in april. that means finishing the law - making beforehand. that is why, from a european perspective, it so important that a major member state will form a new government soon. then we can have a european council position that will pave the way for legislation. this is in my view the biggest task ahead of us in the next few months. it is of the utmost importance, because it will provide a key contribution to reducing the fragmentation in the euro area. the german government has said that treaty revision is needed for a single resolution authority and it doesn ’ t agree on the use of the european stability mechanism for the recapitalisation of banks. we want a joint regime, a joint fund and a joint agency. the ecb lawyers agree with the

states. what are the fundamental causes of this lower trend growth in the euro area? the answers can be found by looking at the factors determining the trend in economic growth, namely employment growth, which in turn is related to labour utilisation and, demographic trends ; and productivity growth. 1 as regards labour utilisation, defined as the total number of annual hours worked divided by total population, the euro area outperformed the united states. over the period 1995 - 2007 it increased by 0. 5 % per year on average in the euro area compared with 0. 2 % in the united states. with a rise in labour utilisation of 2. 0 % on average per year over the same period, the spain ’ s performance was even more impressive. source european commission, ameco database and oecd for hours worked for the us. moreover, data for 2007 are partly estimates. the last update of the ameco database was november 2007. in the euro area, the improvement in labour utilisation mainly reflects the significant rise in the euro area overall employment rate from 58 % in 1995 to 65. 6 % in 2007, 2 which has been accompanied by a decline in the aggregate unemployment rate from 10. 4 % in 1995 to 7. 2 % in december 2007. 3 the latest number is the lowest on record since the early 1990s. in fact, since the beginning of emu in 1999 the euro area has witnessed an increase of more than 15 million in the number of people employed, while from 1990 to 1998, this number only increased by around 3 million. spain ’ s performance, with an increase of more than 5 million in the number of people employed over the period 1999 - 2007, has been simply remarkable. these are encouraging developments, which show that past labour market reforms, immigration and wage moderation have helped to overcome some of the constraints on growth stemming from rigid and over - regulated labour markets. however, despite this progress, we are still a long way from having exhausted the potential for further increases in participation rates and employment. the overall employment rate in the euro area remains low by international standards [ 65. 6 % in the euro area compared with 72 % in the united states, 4 and the unemployment rate is still clearly too high [ 7. 2 % compared with 5. 0 % in the united states at the end of 2007 ]. 5 more specifically, while the prime - age male employment rate in the euro area is comparable to that observed in the