however, on the subject of structural reforms, we should not only focus on far flung horizons, but also look closer to home. germany should lead by example. as a recent oecd study describes, this has not always been the case recently. germany too has structural problems which need to be addressed. examples of these include the lack of sustainable funding of the pension system, inadequate investment in transport infrastructure, and a reform of the tax system, to mention but a few. even bavaria should not rest on the laurels of the past, but should maintain the ambition to defend its leading position. decisive reforms will create the basis for growth and better future prospects in the euro area. rising investment will increase demand for labour, leading to rising wages and, indirectly, rising prices. this will not only bring an end to the low interest rates that are causing many of us such a headache, but we will again have an economically healthy and strong europe of which we can all be proud. many thanks for your patience and your attention! bis central bankers ’ speeches

to proceed. next steps include : completing the banking union, creating a capital markets union, creating a macroeconomic stabilisation function at the euro area level, possibly with a european treasury and a full european monetary fund. these institutional reforms would be crucial for the emu to face two of the most fundamental objectives to consolidate its future : increase its growth potential and restore a path of real economic convergence among its member countries. while at present the recovery is on track, looking ahead the growth potential of euro area economies needs to be strengthened. further efforts thus need to be devoted to strengthening productivity growth which requires an expansion of productive investments. both the recovery of productivity and that of business investments in the euro area has been lagging behind that of the us ( see slide 12 ). 12 / 16 bis central bankers'speeches slide 12 there have been important reform efforts in the euro area in recent years supporting the recovery of potential growth. since 2009 the reform responsiveness in the euro area has exceeded the oecd average ( see slide 13 ). in particular, countries which had financial assistance programmes took a number of reforms to improve their resilience and competitiveness, in particular through reforms in product market regulation, employment protection and wage flexibility, and through revamping of active labour market programmes. many of these reforms are expected to support potential growth but they tend to exert their full impact with a considerable lag. at the same time, the business environment in some of the euro area countries is still well behind that of countries near the frontier, and reform needs are significant. 13 / 16 bis central bankers'speeches slide 13 a final challenge relates to convergence of income levels in the euro area. gradual but real economic convergence of income per capita across all countries is the ultimate condition for a healthy and consolidated economic and monetary union prepared to resist the test of time. taking a long - term perspective 5 – from 1960 till today – and focusing on the twelve initial members of the euro area, it is striking that the euro area crisis ( 2010 – 13 ) was the only period when strong divergence materialised in the dispersion of gdp per capita levels. however, it is since about 1993 – well before the adoption of the euro – that this group of countries does not experience phases of marked income convergence, such as those recorded in the periods 1960 – 1972 and 1986 – 1992. the same applies to broader groupings of mature economies in the european union, such as the member states which had joined the