most important european catalyst for growth, the single market, is still untapped. the single market has been very successful in facilitating trade in goods. hence, competition in this area is intense. the mark - ups that firms are able to charge in addition to their costs due to market power are low and are comparable to those in the us, for example. when it comes to services, however, the picture looks different. mark - ups are higher, on average, than in the us. it is probably safe to say that the services directive has fallen short of expectations. completing the single market for services therefore holds the promise of substantial economic gains. this could be achieved by finally establishing the “ country of origin ”, as is already the case in the common market for goods. this principle states that a firm should no longer be hampered by regulation in the importing country if it has already complied with the national regulations in its home country. the same goes for bringing the single market into the digital age. when it comes to the digital economy, fragmentations still abound, in particular with regard to legal issues such as privacy and data protection, content and copyright, liability of online intermediaries, epayments and electronic contracts. the eu is still comprised of 28 individual digital markets rather than one single digital market. this is holding back innovation, growth and, ultimately, jobs. studies3 suggest that establishing a harmonised and well - regulated digital single market holds the same potential as the introduction of the original one, raising gdp by as much as 4 %. in germany, for example, this could imply an additional 427, 000 jobs over the period 2015 to 2020. some steps have already been taken towards a true single market for the digital economy, but we are not there yet. continuing along this path to the end would provide a major boost to european competitiveness. it is therefore more than worth the effort. another push to eu gdp could potentially stem from an eu - us trade agreement. the us is the eu ’ s biggest export market and its third most important import partner for trade in goods. the ties between the two regions are even closer in terms of service trade. given the already low average tariff rates, non - tariff barriers are probably the greatest stillexisting impediment to bilateral trade. in the first round, the effects on trade and gdp, european commission ( 2013 ), “ the euro area ’ s growth prospects over the coming decade ”, quarterly report

. the financial system and intermediation i shall refer firstly to the financial system as a whole, which enables saving to be channelled from agents wishing to lend funds, because they have a surplus of them, to others who wish to borrow funds, since they are lacking financing. adding to this important function performed by the financial system is that of allowing the transmission of risks to those who have a greater wish or capacity to assume it. this is especially important in an environment of uncertainty. an efficient financial system will enable a greater volume of funds to be channeled towards productive investment and therefore will help to boost economic growth and to achieve greater levels of well - being. but the role of an efficient financial system is not confined solely to the important task of channeling savings, liquidity and risks. an efficient financial system should also contribute to improving financial stability and reducing procyclicality, i. e. the amplification of business cycles resulting from the interplay of the real economy and the financial system. an efficient financial system allows the impact of various shocks to be absorbed, distributing them over a lengthier period of time. conversely, an inefficient financial system overreacts at a later juncture, ultimately impacting the real economy considerably. while we know from recent experience that the interaction between the real and the financial economy is increasingly important and intense, we also know that it is likewise very complex. this is not only because of the progressive increase in the relative size of financial markets, but also because of the growing weight of financial channels in the international transmission of shocks and economic conditions : uncertainty and instability on financial markets and the fall in stock market prices affect households ’ financial wealth ; the cost for companies of resorting to the stock markets to obtain financing to undertake new projects rises substantially ; financial institutions readjust their strategies in step with the new risk context, etc. progress in market participants ’ practices and standards supported by financial regulation and supervision that provide incentives for forward - looking strategies are necessary elements of such macro efficiency. in this way, it is possible to gain robustness and room for manoeuvre in good times, and at the same time encourage good risk management. efficiency in individual financial institutions as regards individual efficiency, deposits institutions have the capacity to pursue selection processes among potential borrowers and, at the same time, on the basis of the relative risk, to set different prices. moreover, they undertake monitoring, seeking to minimise the risk of borrowers not