is subject to exceptionally high implementation risks. the debt exchange operation has been successful, official financing has been scaled up. this has improved debt sustainability prospects : the estimated debt - to - gdp ratio could be brought to about 116½ % in 2020. but this all depends on one key condition, namely that greece fully implements the programme. debt dynamics are extremely sensitive to implementation slippages. delayed fiscal consolidation, lower privatisation proceeds or slower structural reforms : such scenarios would translate into weaker economic growth and worsen again debt sustainability. without a regime - change in policy implementation and a much broader political consensus in favour of painful, but necessary reforms, there is a high risk that the programme derails. therefore, political courage is more needed than ever. bis central bankers ’ speeches let me now comment in some more detail on three key areas : fiscal adjustment, competitiveness gains and financial sector issues. fiscal adjustment the greek authorities and the greek people deserve recognition for the significant fiscal adjustment they have achieved over the last two years : despite the deep recession, the general government deficit was reduced by around 6½ % of gdp since 2009 ( from 15¾ % to 9¼ % ). this broadly corresponds to the deficit reduction that was initially envisaged under the programme, i. e. before the 2009 deficit outcome was revised upwards ( by 2. 2 % of gdp ). this is a remarkable achievement. nevertheless, the size of the government is still too large compared to greece ’ s capacity to generate and collect fiscal revenues. moreover, the quality of the fiscal adjustment was mixed. on the one hand, important reforms have started to address greece ’ s high level of public wages and employment and the previously unsustainable pension system. on the other hand, fiscal adjustment has so far excessively relied on an increase in tax rates and across - the - board expenditure cuts. looking ahead, further progress in fiscal consolidation requires the implementation of difficult structural fiscal reforms. closing the large fiscal gap for 2013 – 14 ( 5½ % of gdp ) will be a litmus test for the government ’ s commitment to the programme : without the government ’ s willingness and ability to design and implement the difficult structural fiscal reforms, such a large adjustment cannot be achieved. i call on greece ’ s political class to push through these difficult reforms by confronting vested interests. otherwise the critical mass of structural fiscal reforms necessary to close the medium - term fiscal gap may not be reached. finally, how can we make sure that the

! innovations in finance offer new opportunities to the financial sector. this may especially be the case in africa, where these innovations are perhaps less of a “ threat ” to the traditional banking sector than in “ overbanked ” europe. but even more important in my view are the benefits of innovation for consumers and businesses. new technology in finance brings more choice, lower costs and greater convenience for users. this not only holds for advanced countries with well - developed banking sectors, but certainly also for africa with its many remote areas and still many “ unbanked ” inhabitants. indeed, a sustainable and prudent development and use of new technologies in finance will help to further promote financial inclusion in africa. and this is of vital importance. for this relationship between financial inclusion and economic growth has been clearly established time and again. financial services are the lifeblood of an economy. access to financial services allows households to smooth out consumption and invest in their future. for businesses, access to credit enables them to expand and to create jobs. financial inclusion, in short, is one key for promoting strong and stable economic growth. innovations in finance are perhaps the most promising way to advance financial inclusion. that is why it is so important that new technologies in finance are being exploited in africa, as this will help unlock the continent ’ s massive “ unbanked ” population. for companies involved in supplying this new type of services this implies that they will continuously need to embrace innovative strategies. in this way, they will be able to shape financial products to fit consumers ’ rising financial sophistication needs. recent history suggests that african companies are able to do so quite successfully. kenya, for instance, has led the world in innovative financial services based on mobile telephony by introducing m - pesa and m - pesa - derived systems such as m - shwari and m - kesho. this has made several financial services available to anyone with a mobile phone at a fraction of the cost. exploiting innovations in finance is one. strengthening institutions is the other. one of the most fundamental questions in economic science is “ why are some countries richer than others ”? differences in the quality of legal, political and educational institutions between countries turns out to be an important part of the answer. indeed, the strengthening of such institutions often goes hand in hand with higher economic growth : countries with stronger institutions experience stronger economic growth compared to countries with weaker institutions. there are several reasons why this turns out to be the case. strong institutions