shall have the three new “ authorities ” and a crosssectoral committee with specific tasks in fostering convergence of supervisory rules and practices in europe, whereas the national supervisors are to remain responsible for ongoing supervision. experience of the crisis indicates that strengthening supervisory coordination is crucial in dealing with the current problems and helping to restore confidence. the objectives of the new framework, according to the ecofin / european council, are to upgrade the quality and consistency of national supervisors ; to strengthen supervision of cross - border groups, in particular, by setting up supervisory colleges for all major eu financial groups and by moving towards a single rule book. the ecofin and the european council also stipulate that the activities or decisions of the new authorities should not impinge on the fiscal responsibilities of the member states and that any binding decision by the new authorities or the commission must be subject to community courts. these key messages from the ecofin conclusions match perfectly with what might be considered to be the “ success factors ” of the new framework. due account should be taken of these when discussing and deciding the details : continuation of a cooperative working style within what should be an operational network rather than a centralised supervisory system. the envisaged binding powers of the new authorities in relation to the national supervisors should be interpreted as a means of speeding up the process of convergence and of strengthening the supervisory system, not as a sign of a hierarchy. it should not be forgotten that the decision - making bodies of the new authorities comprise the national supervisors. in this context, i do not agree with the proposed possibility of decisions taken by the new authorities being communicated directly to financial institutions. i do not want to get into a discussion on fundamental legal issues. however, even from a political perspective or with regard to a possible response on the part of the general public, it is important that one should refrain from direct intervention vis - a - vis financial institutions. communication with the institutions in such matters is solely the responsibility of the competent supervisors. there was a political consensus to upgrade the three committees to authorities with specific powers, including some binding powers over the national supervisors. however, the current commission proposal goes further, giving the three authorities direct powers to take decisions that affect the industry. apart from the legal issues this raises, this approach risks establishing a parallel system of national responsibility – which, incidentally, ecofin is in favour of maintaining –, and decisions from a supra - national authority. taking due account of the fundamental principles of subsidia

, capital goods and intermediate goods. but since 2001, exports in all of these sectors ( including consumer goods ) have been growing more dynamically in germany than in france. if the traditional analysis explains very little in terms of the differences in export performance, what else accounts for these differences? are the worried voices right after all? no, they are not. first of all, intra - euro - area trade is more important for france than it is for germany. in france, the share of exported goods to other emu countries amounted to 48 % of all exports in 2005, whereas in germany it was 5 pp lower. consequently, france appears less dependent on the euro ’ s exchange rate than germany. however, the bdi ( the federation of german industries ) said last month that german industry could live with the strong euro, as long as it does not rise sharply. even more importantly, the wishful thinking behind a policy - driven weakening of the euro does not go to the core of the problem. all things considered, differences in export performance are linked to differences in competitiveness. as far as price competitiveness is concerned, it has increased in both germany and france since the start of emu. but in germany, the increase has been more pronounced. one reason for this has been wage policy moderation in germany. in addition to that – and unlike french firms – german firms have boosted their competitiveness by increasingly outsourcing their production processes to low - cost countries. so, to some extent, the recent weakness of french export performance compared to germany can be explained by stronger gains in german price competitiveness. but what is more important : overall export performance in france cannot adequately be explained by traditional factors. estimations usually contain a noteworthy residual term. what accounts for it? its reasons actually are more of a microeconomic nature, as has already been put forward by the french council of economic analysis 1. examples are product differentiation, technological progress, reputation, marketing, or the export readiness of smes. for instance, the figure for french firms that export is only 4 %, compared with 11 % in germany. moreover, french export firms are, on average, smaller than german ones. the upshot of this is that competitiveness is enhanced by firms, not in exchange rate markets. if politicians want to support domestic industries they should do so by increasing the flexibility of labour and product markets through structural reforms, not by interfering with market forces. but let me come back to my original theme