term economic growth, the composition of the fiscal adjustment is very relevant. moreover, the combination of this consolidation efforts with other structural reforms on which i will focus later might be crucial in order to smooth and reduce the public finances adjustment needs. in addition, given the high degree of decentralisation of public spending in spain, all government decision centres must contribute to this effort. to this end, it is crucial to provide efficient mechanisms to finance the different competences, permitting citizens to identify the bodies responsible for implementing the different public policies. on a related matter, let me mention that the adequate access to external financing by regional governments – be it by credit provided by financial institutions or through the capital markets – is of particular importance to avoid a pro - cyclical stance in the provision of the public services, and guarantee market pressure geared towards fiscal discipline. currently, an exceptional mechanism is in place, namely the “ fondo de liquidez autonomica ”, whereby the central government provides funds to most regions, in the form of bilateral loans, in exchange for a heightened control over their fiscal policies. however, in the current favourable macroeconomic and financial context, regions should regain market access. challenges of the spanish labour market the second session of the conference is devoted to the challenges facing the spanish labour market. during the last three years, the annual growth rate of employment has been 3. 0 %. in the last five years, the unemployment rate decreased to 16. 5 % at the end of 2017, more than 10 pp below its peak at the beginning of 2013. despite these positive developments, unemployment is still at unacceptably high levels, in fact, the second highest in the euro area after greece. the high incidence of long - term unemployment, which now stands above 50 %, is signalling the risks of hysteresis in the labour market, which would make the reduction of the unemployment rate to pre - crisis levels more difficult. from a longer perspective, the spanish economy also faces three important challenges. first, even at the height of the last expansion in 2006, spain had an unemployment rate of 8. 2 % which was far off the best performers at that time. second, during recent decades, 5 / 9 the segmentation of the spanish labour market has been very marked, with a temporary rate exceeding 25 %, 10 pp above euro area averages, which contributes to exacerbating the volatility of employment and reducing productivity growth. third, the spanish economy should be ready

backed securities, by structuring asset pools into tranches with different risk levels, could potentially contribute to such diversification. there are commission´s proposals in other areas. among them : the setting - up of an european monetary fund, which would take over the current functions of the european stabilization mechanism, eventually adding the role of common backstop for the single resolution fund ; the establishment of an european minister of finance, who would also be vice - president of the european commission and chairman of the eurogroup ; and the creation of a common stabilisation tool for investment, which should not preclude the future development of a genuine european budgetary capacity for economic stabilisation purposes. those are proposals that deserve careful consideration. moreover, the crisis has made it clear that the european budgetary framework is very complex, which highlights the need to simplify it. recent proposals, which seek to reduce the current excessive number of rules, by focusing on the public debt to gdp ratio, as a medium - term anchor, and to the expenditure rule, as an operational tool, seem promising. in any event, reinforcing the oversight and control of fiscal rules is necessary to ensure their fulfilment. the aim should be that the budgetary governance framework is able to encourage countries to generate room for manoeuvre during expansionary phases, so that the stabilising capacity of fiscal policy may increase in the euro area, as a whole, at times of crisis. 8 / 9 summing up : much work remains to be done in the coming months and years. we should make good use of the current benign environment to progress in our european integration agenda. much is at stake, most notably keeping our achievements alive, preserving our political, economic and social model, and ensuring a pivotal role for a united europe in an increasingly globalised world. 9 / 9