growth rates are linked to a deterioration of competitiveness, driven, for example, by persistent above average unit labour costs. ahead of emu, unit labour costs converged in the euro area. what is more – disregarding the most recent countries to join the euro area – dispersion both ahead of the crisis and during the crisis was very similar in the euro area and the united states. at the same time, it is worth noting that both currency areas include regions with persistently above or below average unit labour cost growth. again leaving aside the most recent countries to join the euro area, here, greece, portugal and ireland, in particular, have lost competitiveness vis - a - vis their main trading partners in the euro area. germany, in contrast, has been able to lower relative unit labour costs over the same period of time. bis central bankers ’ speeches similar persistent losses and gains in competitiveness are also observed in the united states. some states have experienced large or persistent increases in unit labour costs, currently exceeding the national average by as much as 20 %. other states, on the other hand, have been gaining competitiveness vis - a - vis the national average over the past decade. bis central bankers ’ speeches in summary, these results suggest that those who are questioning the viability of the euro area as a single currency area on the grounds of economic heterogeneity are misguided. over the past 12 years, heterogeneity in the euro area and the united states has been broadly similar. this should, however, be no reason for any complacency in the euro area. as the crisis has taught us, persistent losses in competitiveness on the part of individual members in a currency union lead to a build - up of external and internal imbalances. when these unravel, the cost for the affected economies can be very large. they can also have spillover effects on other members of the currency union. in any union, an economic governance framework is needed to prevent developments in an individual member state endangering the smooth functioning of the union. but for emu, the economic governance framework devised in the 1990s has not been correctly implemented and, in any case, has proved too weak during the crisis. the crisis has exposed a clear need for strong reform. as i speak today the reform debate is still in progress, and in the last part of my remarks today, i would like to talk briefly about the present reform of economic

. on ukraine's side, strong ownership and reform momentum will need to be maintained to pave the way for the programme's success and to support reconstruction efforts. amid increasing fragmentation dynamics, international cooperation is more important than ever. we support a strong imf at the centre of the global financial safety net. a solid capital position is a precondition for the imf to be able to appropriately support its members, particularly the most vulnerable ones. we welcome the spirit of compromise which enabled the conclusion of the review of imf precautionary instruments, given their important role in crisis prevention. going forward, the impact of the expanded access by countries to imf resources should be closely monitored, while the signalling effect of precautionary instruments should be retained. eu member states and central banks are playing their part in the imf and in the recent drive for resources. with pledges of more than usd 31 billion, they have made a significant contribution and lead the way in transferring resources to imf trusts ( poverty reduction and growth trust and resilience and sustainability trust ). geoeconomic tensions have increased in recent years, in particular with russia's invasion of ukraine. these tensions may result in a regionalisation of international trade and value chains. trade fragmentation could be damaging to the global economy, reducing efficiency in the allocation of resources, hindering diffusion of innovations and limiting access to external financing. ultimately, global production could be lower and prices higher a€ “ to the detriment of the poorest. geopolitical tensions could also lead to 3 / 4 bis - central bankers'speeches foreign direct investments segmenting along geopolitical lines and global payment systems becoming more fragmented, thus reversing some of the gains from financial integration. this would not only reduce global risk sharing but also limit opportunities for channelling funds towards investments needed to mitigate and adapt to climate change. in view of these risks, multilateral cooperation remains essential. this also holds true for filling the investment gap to achieve international climate goals as there will be high social costs if we get the green transition wrong. large crossborder investment flows are needed, which requires further convergence and accurate assessment of national and international frameworks. in addition, we need to create an environment in which climate finance is levelled up steeply to fund the transition, and in which public finance works as a catalyst for increased private capital flows. the eu is working towards those objectives and has enshrined both a long