of the response from the tradable sector, in particular the exports that rebalanced the external accounts and mitigated the impact of lower domestic demand on the non - tradable sector. 3. the maintenance of confidence in the banking sector as evidenced by the behaviour of deposits. this was crucial to preventing the economy from collapsing with a credit crunch and avoiding the imposition of capital controls. it is important to remember that an adjustment programme is always a short - term programme whose effects are only sustainable if there are structural and institutional adjustments that prevent repetition of the conditions that led to the need for adjustment. over the last decade, portuguese gdp has remained 30 – 40 % below the eu average, without converging towards the richest economies. a lasting trajectory of growth and convergence towards our european partners depends on our capacity to generate and maintain high levels of employment and productivity. this is a necessary condition to ( i ) bring our workers ’ wage levels closer to european standards ; and ( ii ) finance the welfare state in a context of unfavourable demographic developments. the challenge is thus one of activating the ‘ levers ’ of employment and productivity. portugal has had historically low levels of capital per worker. adverse developments in business investment during the crisis, with a reduction of 34 % between 2008 and 2013, contributed to capital shortages. it is therefore vital to increase investment and take advantage of that recovery to learn from past mistakes, scrutinising investment projects in a far more demanding way. the infrastructure and support services are available, the investment in the non - tradable sector has been made. now that must be capitalised upon, creating capacity in the economy ’ s tradable sector. the recovery in investment is, however, constrained by the ( still ) high indebtedness level and low savings rate of the portuguese economy. this means that the increase in investment will have to be financed through an increase in equity, either from existing shareholders, or the entry of new domestic or foreign shareholders. in portugal, employees ’ skills have improved considerably in recent years but gaps remain in relation to european averages. the formal education of our workers must continue to improve. in particular, those in employment the longest but with fewer qualifications have a lot to benefit from life - long learning, which enables them to transform their skills and better take advantage of the jobs of the present and future. moreover, we also need management models that encourage openness to risk and favour decentralised decision - making

##ened beyond the budgetary area by including external imbalances. going forward, monitoring macroeconomic imbalances and coordinating economic and fiscal policies will need to be further strengthened. we must, however, be aware that, even with appropriate rules and institutions, a monetary union is not immune to exogenous shocks and specific problems in any of its members. during the great moderation, member states postponed structural reforms and the adjustment of 1 / 5 bis central bankers'speeches their economies to globalisation. costs were absorbed by public expenditure until it was no longer possible to do so. today we face the problem of finding ways to increase productivity and innovate in order to increase potential output and preserve our social model. this reinforces the importance of working at the structural level, focusing on productivity growth, sustainable employment growth and the reduction of indebtedness. in parallel, the economic and monetary union ( emu ) must have stabilisation mechanisms which can support member states facing serious financial difficulties while safeguarding the stability and cohesion of the group. currently, several proposals for macroeconomic stabilisation in the euro area have been presented : investment stabilisation, reinsurance of national unemployment schemes, rainy day funds, etc. the need to provide emu with a stabilisation mechanism was one of the lessons of the financial crisis and the reason for the creation of a permanent institution, the european stability mechanism ( esm ). the esm is also under reform to strengthen its role, its capacity to act and the effectiveness of its instruments. this reform needs to be ambitious. i have often argued that the esm should evolve towards a genuine european imf - type of institution. an institution with a clear mandate, with adequate means and independence from member states. it should be robust, adequately resourced and designed to respond quickly and effectively, while promoting accountability and minimising moral hazard. i would like to turn to the financial sector where reforms were most visible. in the years preceding the global financial crisis there was a strong increase in risk - taking and leverage. bank credit expanded disproportionately compared to economic growth. risk was spread across continents and across institutions. as the great financial crisis unfolded, governments of fiscally strong countries resorted to bailouts when banks that had become too big, complex and interconnected were at risk of failure. letting them fail would have meant that households and businesses would have been unable to access their money, finance their projects or make payments