spillovers of the financial crisis on economic growth, on unemployment and on public finances, the citizens in our countries will not forgive us, if we fail to draw the right lessons from the crisis. in my view, there are three main lessons to be learnt : • first, the need to build a more resilient financial sector, • second, the need for fully coordinated measures to that end at the global level, and • third, the need for all systemic economies to embark on sound macroeconomic policies over the medium and long term. the epicentre of the crisis was located in the financial sector. therefore the global financial system has to be made more resilient. current efforts are under way, and the focus must now be on implementation. this concerns both financial regulation as well as oversight. in the eu, financial sector supervision is on the way to be strengthened in a two - pronged approach. a european system of financial supervisors will be established to permit better coordination among national authorities that oversee financial regulation. and a european systemic risk board will be responsible for macro - prudential supervision. this new body will provide early warnings and issue recommendations to help prevent any renewed build - up of excessive risk in the financial system as a whole. these measures are not the end of the road on regulatory and supervisory reform, but, once implemented, a significant step forward. although they are aimed at the financial sector, they will serve the economy as a whole, not least manufacturers. the manufacturing industry has a stake in a stable and resilient financial system. the crisis has revealed the very high level of interconnectedness of the global financial system. this constitutes a compelling case for very close international cooperation and solutions at the global level. there is an overwhelming need to implement global reforms in a coordinated fashion and along the same concepts, in order to preserve a global level playing field that would be solid and resilient. finally, the crisis has again stressed the need for all policy - makers to contribute to financial, macroeconomic and price stability over the medium and long term. in the area of monetary policy, a sound legal and institutional framework for central banks promotes medium - term and stability orientation. the primary mandate of the ecb is to maintain price stability. to fulfil this mandate, the ecb and national central banks are institutions whose independence is firmly enshrined in law. this framework has been crucial to anchoring inflation expectations. it has also facilitated our task of maintaining price

back of strong output growth and revenue windfalls. it is now essential that the momentum of improving public finances is maintained and that the pace of fiscal consolidation accelerates in 2007 and 2008 so that all euro area countries attain their medium - term objective of a sound fiscal position as soon as possible. better than expected budgetary outcomes in 2006 and possible further revenue windfalls this year should be used for faster fiscal consolidation. experience has shown that the temptation to relax expenditure restraint, delay necessary reforms or pursue pro - cyclical policies in an upswing needs to be firmly resisted. fiscal consolidation measures have the best chance of success when they are based on a credible and comprehensive reform strategy, with a focus on reducing expenditure rather than increasing revenue ratios. the governing council stressed that progress in the area of structural reforms and moderate increases in labour costs in some countries have been key factors in increasing employment and reducing unemployment over the last few years. indeed, while still high at a rate of 7. 5 % in december 2006, the standardised unemployment rate was the lowest since the series began in 1993 and has fallen by 1. 4 percentage points since its latest peak in june 2004. to fully exploit the beneficial effects of economic and monetary union and the single market, further structural reforms must enhance the adjustment capacity of the euro area. this includes sufficient wage differentiation, especially to improve employment opportunities for less skilled workers and in regions with high unemployment. it also encompasses more flexible product and labour markets that would give rise to new investment possibilities and innovation. and it requires the removal of impediments to labour mobility – between jobs, between regions and across borders. let me therefore recall that with slovenia having entered the euro area, its labour force needs to be granted full access to the labour markets of all euro area countries. generally, structural reforms, in combination with fiscal consolidation, must support sustainable developments by limiting the burden that is shifted to younger and future generations. considerable challenges therefore remain, which differ across countries but which all urgently require determined action. we are now at your disposal for questions.