are compounded by an ongoing change in the deep structure of the economy. for one thing, structural changes amplify the identification problem. it becomes more difficult to ascertain whether new developments are going to be reversed and eventually vanish, or will become ingrained in the underlying economic mechanism for many years to come. but more importantly, if a structural change is truly under way, macroeconomic relationships derived from empirical regularities and historical averages are bound to loose significance. a new set of relationships would need to be estimated and tested. but serious diagnostics for structural stability rarely give definitive answers, and re - estimation requires sufficiently extended spans of data that simply do not yet exist. structural changes over recent years the past decade, on both sides of the atlantic, has not been kind to policymakers ’ aspirations to a comfortably stable set of structural relations usable for policy analysis. at the very least, the second half of the 1990s and the early years of this century have sent us stark reminders that the economic structure does not hold still for long. our recent experience in coping with economic changes has provided more than one stress test of the macroeconomic models that are in use in our institutions. let me mention some sources of structural change that are specific to europe. the setting up of a true single market out of the various economies member of the european union is a very ambitious endeavour, which has no historical precedent and is triggering large scale structural changes in the european economy. fully part of these bold transformations are reforms in the labour and goods markets. these reforms aim to reduce distortions induced by regulation, strengthening the euro area ’ s competitive position and its resilience to shocks. this ongoing process to create a single economic entity that would itself be flexible - thus improving the potential for the economic structure to self - correct - is likely to bring about notable changes in macroeconomic relationships based on past observations. one recent additional source of structural change in europe lies with the enlargement of the european union that took place in may 2004. the european union has witnessed its greatest ever enlargement with the accession of ten new countries, mainly from eastern and southern europe. the ten new member states will eventually adopt the euro, when the time is right, namely after nominal and real convergence is performed, affecting in turn the euro area aggregate through a change in trade patterns, capital and labour flows and a higher level of competition. enlargement has already provided new opportunities for trade and investment. these effects are visible in a

of the european securitisation framework could also provide insurers with new solutions for diversifying their strategic asset allocation. there is much more at stake here page 3 of 9 than technical discussions over prudential ratios – it is a matter of strategic importance for europe. the development of equity financing is essential if europe is to catch up in terms of innovation. our continent has the resources – private savings ; it also has the needs – investment in the transformations of the european economy. but, unlike the united states, it does not have sufficient financial intermediation between the two. this is precisely the goal of a genuine savings and investments union, as recommended by the draghi and letta reports. and this union is not just aimed at banks, markets, private equity funds or venture capital funds. it needs to rely on you, insurers, as well. ii. an increasing role in the future 1 ) the transformations under way in our society in a world that is changing more rapidly, new risks are emerging. to what extent can they be covered by insurers, or to what extent are they in fact “ insurable ”? i ’ m going to focus here on three challenges. first, the challenge linked to the digital transformation, which has been accelerated by the pandemic. although this transformation is indeed generating opportunities and efficiency gains, it is also making information and operational systems increasingly complex – notably due to fragmentation linked to the growing use of external service providers – and increasingly exposed to sophisticated cyber attacks. the insurance industry needs to maintain greater vigilance over these risks to guarantee its own resilience. the imminent entry into force of the dora regulation is contributing to this. more generally, it is crucial that all firms and citizens can protect themselves against these heightened it / cyber risks. here again, the insurance industry has a predominant role to play, through initiatives to raise awareness, but also by developing cyber insurance. the second very concrete transformation facing the insurance industry is climate change. the biggest direct consequence is an intensification of the physical risks, which translates as a rise in the frequency and cost of insured climate events : we ’ ve just witnessed this dramatically in mayotte. according to swiss re, natural disasters generated total economic losses of eur 295 billion page 4 of 9 in 2024, an increase of 6 % compared with 2023. i and in the latest edition of its climate scenarios, published in november, the ngfs ii – our network for