is stifled. 4 there ’ s no lack of reform proposals. recommendations are in abundant supply, not just from the european commission, but from other national and international organisations as well. germany, too, is facing major challenges. it needs to ready its social security systems to withstand the challenges posed by demographic trends, push labour force participation higher still, and step up investment in education so that those in work are more productive and less at risk of losing their jobs, plus it will have to expand its digital infrastructure. but aside from these major challenges, it - related productivity gains can also be harnessed on a smaller scale, such as in the country ’ s public administration, which is another area which has some catching up to do in the deployment of digital information and communication technology. for instance, to apply for a german id card, you still have to turn up in person at your local municipal administration office. regrettably, very little progress has been made on this score, as a recent european commission report on the digital economy and society in the eu member states confirms. germany ranks a meagre 20th for its public services, while austria occupies a far - superior sixth place. 3 / 9 bis central bankers'speeches the european level still has a great deal of unharnessed growth potential of its own, however. the eu single market has been a success story, but the tale isn ’ t over yet. one huge step forward would be the completion of the single market for services, because unlike the single market for goods, trade in services is still subject to national barriers. the forces of growth would also be given a shot in the arm if the single market switched wholesale to digital goods. 5 europe ’ s markets for digital goods remain heavily fragmented, especially where the protection of privacy, copyright, and liability issues are concerned. yet businesses would reap rewards not just from a complete single market but also from broader funding opportunities. this is where the capital markets union comes into play. european businesses still mainly use bank loans as their chief source of funding. harmonising regulation or, for example, boosting investor protection in the venture capital market might make it easier for businesses to source equity capital on a larger scale. not only would that broaden enterprises ’ funding options ; it would also make them more resilient to economic shocks. that ’ s because equity capital absorbs losses, while debt capital still needs to be serviced in full, even when times are hard, if a company is to

fiscal policy to the member states. yet the safeguards i have just mentioned were unable to prevent government debt from ballooning in a number of euro - area countries. this was partly due to repeated breaches of the fiscal rules – incidentally by germany too, shortly after the launch of monetary union – which the capital markets failed to punish by demanding higher risk premiums because the no - bailout clause lacked credibility. but another reason for the ballooning debt levels was undoubtedly the financial crisis, which saw a number of euro - area countries being forced to shore up their banking systems. this was compounded in the subsequent sovereign debt crisis by emerging doubts over debt sustainability in some member states. rescue measures were swiftly rolled out to prevent the crisis from coming to a head. these measures, however, did not make monetary union crisis - proof once and for all. quite the opposite, in fact. by adding further elements of mutual liability, they softened the principle of independent responsibility. since economic and fiscal policy matters continue to be issues of national ownership, the 5 / 9 bis central bankers'speeches relationship between actions and liability has got out of kilter. the euro area will only ever be crisis - proof once and for all if renewed importance is attached to the liability principle. there are two ways in which this can be achieved. either through deeper integration, ie a situation where every member state surrenders decision - making powers in fiscal and economic policy matters to the european level, or by returning to an overhauled maastricht treaty, which would mean more national ownership and each member state being liable for the decisions it takes. the first solution is the road to a fiscal union with centralised decision - making powers. while a fiscal union would not guarantee sound fiscal policymaking, it could curb the propensity to run a deficit i mentioned earlier this evening. former german federal chancellor helmut kohl, who sadly passed away recently, was already a firm believer that monetary union was merely one step on the path leading to political union. addressing the bundestag in november 1991, he remarked that “ the idea of sustaining economic and monetary union over time without political union is a fallacy ”. genuine political union proved unfeasible back in the early 1990s, however, and it appears to me that little has changed in this regard since then. not least because the necessary transfer of sovereign rights would require comprehensive changes to be made to the eu treaty and national constitutions. it would appear, then, as