fact, the european perspective becomes much more important as time passes. why is that? well, because there are many challenges that are in fact supranational by their very nature. that is to say, you can ’ t really respond to these challenges, and you can ’ t really address the problems at national level if they are supranational. just let me give you an example : security is not something that people can actually address only at national level. unfortunately, we have seen this very frequently through various terrorist actions. everything in economics now is basically global. so it ’ s even beyond being only european. it ’ s actually all over the place. the more we integrate, the better we ’ ll be placed to address economic issues of this nature. think about defence. does it make sense today saying that countries are able to defend themselves against global challenges? well, less and less. think about another challenge : migration. migration is not a problem of one country. it ’ s a problem, a challenge and an opportunity for a group of countries. in this case, the european and eurozone countries are certainly called to respond to this challenge. all this means that having a european perspective has become essential to understand today ’ s problems and the possible solutions. the key 1 / 2 bis central bankers'speeches question that you will be asked more and more in the future is “ what can we achieve together? ” we count on you to embark on this long journey : we invite you to be our ambassadors, to continue the conversation on europe in your schools and cities, with your relatives and friends. you will have an important role to play in tomorrow ’ s europe, but that role, that responsibility, starts today. you give us not only hope for a better future, but you also inspire us to continue our work. we should be the ones to be thankful to you. finally, let me express a special “ thank you ” to the teachers here for making this event happen, and for the wonderful guidance and support you have given to your students. let me also add a “ thank you ” to some people who are not here, who are your families, for the support they must have given to you to be able to reach such an achievement today. you are very lucky to be so well taught – even if you might not have realised it ; or even if your teachers might not be aware of how much good they have given to you ; or even if your families

key priorities, namely : • increasing the flexibility of labour and product markets and furthering economic integration ; and • implementing a stable macroeconomic framework. this is, of course, not an exhaustive list. but i think that these are the key elements for macroeconomic policy, and i will focus on these here today. increasing the flexibility of labour and product markets and furthering economic integration well - functioning, integrated markets are required in order to meet the challenges posed by greater innovation and increase the adjustment capacity of an economy. for this to happen, labour markets need to be flexible. in the context of rapid technological change, it is essential to ensure that the labour force is employable and flexible by facilitating the adjustment of human capital in line with labour market needs. a high level of employment protection legislation may have a particularly strong negative impact on industries experiencing rapid technological change, since it may prevent the efficient matching of workers to jobs in view of new job requirements. unfortunately, progress in increasing contractual flexibility, particularly for permanent contracts, has been disappointingly slow in several euro area countries. wage flexibility also has an important role to play in the smooth functioning of markets. structural rigidities in wage setting, by not allowing firms and sectors to remain competitive and not sufficiently reflecting existing levels of unemployment, reduce market opportunities for firms and thereby limit labour demand, investment and long - term growth. in addition, an economic environment comprising well - integrated goods markets and financial systems provides a level playing field allowing productive forces to thrive. some progress has been made in the eu in strengthening competition and increasing economic integration over the last two decades. the single market initiative has already brought about considerable benefits for the eu economy. the european commission recently estimated that the single market had resulted in 2. 75 million extra jobs over the period 1992 - 2006, corresponding to an increase in welfare of €518 per head by 2006. 8 however, much remains to be done, particularly in some service sectors. the extension and deepening of the eu ’ s internal market clearly remains a priority as regards further financial market integration and the implementation of the services directive. the economic importance of services suggests that improvements in european living standards will crucially depend on productivity improvements in this area. ecb studies, including work presented at this conference, have shown the key importance of financial integration and modernisation for the efficient operation of the economy. 9 the process of european financial integration is gradually taking place, with considerable progress being made, for instance, in capital markets and wholesale