a large part responsible for the problems we are facing today. in particular, i will illustrate how those member states whose competitiveness has deteriorated substantially since monetary union have not managed to take advantage of it. second, i will describe germany ’ s economic performance during the crisis and the recovery. in particular, i will show how germany served as an import buffer during the economic downturn that followed the financial crisis. now that many countries are struggling with recovery, the more dynamic upswing in germany is providing an important impetus to the rest of europe. finally, i will turn to the challenges that the european sovereign debt crisis is posing to germany. considering that germany is providing a large part of the fiscal contributions to euro area countries with refinancing problems, confidence in germany ’ s solvency is vitally important in the current situation. germany therefore bis central bankers ’ speeches has to set an example for implementing sound fiscal policies within the euro area. however, this alone will not be sufficient to resolve the sovereign debt crisis. to secure long - run stability within emu, significantly stronger incentives for sound public finances are indispensible. 2. intra - emu divergences what critics actually have in mind when they talk about germany ’ s export strength is the existence of current account surpluses which contrast with current account deficits in other emu member states or other countries around the world. i would like to emphasise that neither current account surpluses nor current account deficits are a bad thing per se. current account surpluses reflect net foreign lending and current account deficits net foreign borrowing, and depending on the circumstances, both can be appropriate for a given country. for a country with a declining working - age population, for example, it is quite reasonable for residents to save money for the future and to invest a share of it abroad. by compensating for a shrinking income in the future, the money saved today allows consumption to be smoothed over time. conversely, countries which are undergoing a catch - up process and need financing for the investments might be willing and promising borrowers of foreign funds. consequently, for a proper assessment we have to take a closer look at the underlying drivers of current account surpluses in some euro - area countries and of current account deficits in others. one worrying development is that divergences in current account balances have mostly gone hand in hand with divergences in price competitiveness. whereas germany, as a surplus country, has been able to improve

), “ the search for mexico ’ s economic progress. ” presented at alamos alliance xx, february. based on ppp - adjusted data from the energy information administration, the mexican energy secretariat ( sener ) and the oecd, including residential, commercial, services and agricultural. bis central bankers ’ speeches unbroken. the monthly proxy for gdp gained ground four consecutive months starting in april, tracing a continued upward trend despite a moderate decrease in august. industrial production shows an increase in manufacturing and construction, although not mining, which has been affected by lower petroleum output. hampered by a contracting pace of public - sector projects, construction is still driven almost exclusively by the private sector. in the third quarter, manufacturing exports kept up a significant growth rate, mainly to a strongly performing united states. additionally, improvement in consumption and an upturn in private investment have been prolonged. pulled by the u. s. economy, mexico is expected to post a gradual economic recovery during this and the next two years. the main risks to this scenario seem to be to the upside. a more robust rebound than foreseen for the united states, the lagged effect of high government outlays on output, and the probable impact of structural reforms, could contribute to this outcome. 7 as with other emerging economies, international volatility has affected financial assets in mexico. over the year, the yield curve shifted downward along with that of the united states, reflecting the perception that u. s. monetary normalization would be gradual and not imminent. since the end of july, however, market sentiment has been moving in the opposite direction, thus reversing some of the flattening of the yield curve. the fed has stated that the normalization process will be data dependent, thus making for more uncertainty ahead. indeed, in recent weeks, magnified global risk aversion has resulted in increases in long - term rates, widening the spread over u. s. yields. additionally, the peso has depreciated, reaching its weakest level so far this year in november. however, the peso has depreciated less than the currencies of many other emerging economies, and markets have been orderly, operating with more than sufficient liquidity. risks of new bouts of volatility remain. further pressure on emerging - market asset prices could occur. interest rates on many developed - market securities, such as high - yield bonds, trade at near all - time lows in the face