of workers between sectors and firms. so far, investment in human capital development in europe is insufficient. for instance, the number of european school - leavers who go on to complete higher education is inadequate for the knowledge - intensive economy. in the euro area, only finland and ireland have reached a comparable level with the u. s. in this field. human capital improvements in these countries came together with a fast development of the sectors within information and communication technologies. as a consequence, they enjoy a labour productivity growth performance which is significantly above the euro area average. a comparison with the u. s. illustrates the knowledge gap very well : in the us, annual expenditure on higher education institutions per student represent 57. 8 % of gdp per capita, while in the euro area 35 % is spent. creating well functioning, competitive and efficient markets is another key aspect of the lisbon strategy. in a number of fields clear progress has been made. for example, most network industries are now fully or largely open to competition, in particular those in telecommunications and air transport and to a lesser extent in energy markets. and the reforms do pay off : the remarkable labour productivity growth performance in network industries in europe over the last ten years provides a perfect example of the positive impact on labour productivity growth of easing regulations and fostering competition. we also need to make europe an attractive place for businesses to operate in. here, some progress has been made in the reduction of excessive business regulations, for instance by reducing the time and costs required to set up a business. all in all, progress has been made to promote long - term productivity growth and to increase labour utilisation, but the extent differs widely across countries and policy areas. although the structural reforms have been moving in the right direction, they have not been far reaching enough. in fact, we need to step up considerably the implementation of the necessary reforms in order to achieve the lisbon goals. in particular more progress in labour market reforms is needed to attract more people into labour market and investment in research and development and human capital should be strongly encouraged. what needs to be done is rather clear. but how to deliver it in an environment of rapid change is the more challenging question. the difficulties faced with delivering the lisbon strategy in the first five years may be summarised under three headings : a lack of focus, a lack of adequate commitment and a lack of incentives. or, as the kok report put it in november 2004 : the lisbon strategy had become “ about

until recently had been relatively spared of the recession of the peripheral countries, have begun showing signs of weakness. accordingly, the risks in the eurozone remain. in the united states, the recovery of output and demand is weak, insufficient to quickly absorb its high unemployment. the federal reserve has undertaken to keep an ultraexpansionary monetary policy in place for as long as this situation persists and does not jeopardize inflation, which has important implications for the global financial scenario that the chilean economy will continue to face in the coming years. plus, the u. s. has a high fiscal deficit that reflects in an excessive increase of its public debt. if a political agreement is not achieved, early next year a number of automatic adjustments of taxes and expenses ( the socalled fiscal cliff ) will be forced into the economy. given the sluggish growth in this country, if they have to apply such major adjustments, the economy will relapse into a new recession. unfortunately, when the deadline is only days away, there are no signs of agreement in sight. bis central bankers ’ speeches the emerging world continues to outperform the developed economies, although with greater diversity within the group. in china, indicators suggest that growth is picking up after the deceleration of most of 2012. latin america, meanwhile, has shown reduced growth during the year and the outlook for the next two years has also been revised downward. the slowdown has been sharper in brazil and it is not clear what the velocity of its recovery will be. mexico and colombia have also begun giving signs of a slowdown. peru continues to grow strongly, while argentina is dealing with major adjustments. the chilean economy has remained on an upward slope, driven by strong domestic demand and, particularly, fixed investment. also, private consumption has increased in line with the significant increase in personal income. still, we face significant risks, which i will look in more detail in a moment. those coming from abroad have to do with the world economic situation i just described ; domestically, they relate to the possibility of an exacerbation of output and expenditure. beyond these risks, in the baseline scenario that today we believe to be the most likely, the chilean economy will resume growth in line with the trend, while inflation will gradually return to levels that are consistent with the target. let me now describe this scenario and the risks we have identified. macroeconomic scenario the macroeconomic scenario facing the chilean economy has not changed significantly in