in line with rates of sustainable growth and price stability. reinforced fiscal surveillance, for all its critical importance, is not enough. we need to scrutinise more closely the macroeconomic policies. we need reinforced macroeconomic surveillance. you know that the monitoring of fiscal and macroeconomic policies in the european union and the euro area is performed by peer group fora : the eurogroup and ecofin meetings of finance ministers. the european commission typically supports the activity of these fora. of course, effective monitoring requires adherence by members to the policy framework, it requires peer pressure and consequences to deal with deviant behaviour, and it requires reliable statistics. europe ’ s economy : the current challenges and the way ahead let me come to the third part of my remarks : what is expected of national governments and of european union institutions? starting from fiscal policies, in some countries there remain significant concerns about the sustainability of their own fiscal positions. it is not possible to procrastinate further the solution to these problems and fiscal authorities need to act in order to strengthen public confidence in sound public finances, thereby reducing risk premia in interest rates and supporting sustainable growth over the medium term. more generally, all euro area governments should step up consolidation efforts in a way that is credible and lays the foundation for sustainable long - term growth. to this end, it is essential that countries pursue credible multi - year consolidation plans and fully implement the planned consolidation measures. positive fiscal developments that may emerge, reflecting factors such as a more favourable than expected economic environment, should be exploited to make faster progress with fiscal consolidation. in their 2011 budgets, countries need to specify the necessary fiscal adjustment measures in detail, while standing ready to correct any slippages from the fiscal objectives announced. in this context, let me express the appreciation of the governing council for the economic and financial adjustment programme which was recently agreed by the irish government with the european commission, in liaison with the ecb, and the international monetary fund. i am sure that the programme is suited to bring about a sustainable stabilisation of the irish economy and sooth the tensions in financial markets that are associated with the irish fiscal problems and the reorganisation of its banking sector. furthermore, by addressing in a decisive manner the economic and financial causes underlying current market concerns the programme will also contribute to restoring confidence and safeguarding financial stability in the euro area as a whole. equally important is that structural reforms are rapidly implemented that enhance the prospects for higher sustainable growth especially in those countries that have

japan, where total exports amount to 15 % of gdp and imports 13. 4 %. moreover, particularly noteworthy for the euro area is that the increase in trade with the rest of the world has been even greater than the increase in exchanges within the euro area. what is even more remarkable, perhaps, is that the euro area is more financially open than the united states and japan. let me present four observations. the first observation is that the external assets and liabilities of the euro area, as a percentage of gdp, are very large and account for around 124 % and 137 %, respectively. by comparison, in the united states, the corresponding figures are substantially lower : 90 % of gdp for assets and 110 % for liabilities. in japan, foreign financial assets are likewise significantly lower than in the euro area ( 94 % of gdp in 2005 ), and the difference is even greater for liabilities, which represent only 60 % of gdp, i. e. less than half of the corresponding figure for the euro area. this highlights how the euro area is very outward - looking. my second observation is that the euro has very probably contributed to the financial opening of the euro area. on the assets side, stocks of euro area assets held abroad increased from less than 87 % of gdp in 1999 to, as mentioned, over 124 % in 2005. on the liabilities side, the increase was also very substantial, from around 92 % to 137 %. the rise has actually been much less pronounced for the united states : us assets have grown from 80 % of gdp in 1999 to 90 % today, and us liabilities have increased from 91 % to 110 % of gdp. in other words, the euro area has witnessed a more substantial increase since the start of economic and monetary union. my third observation is that the euro area is an attractive place for fdi. a breakdown reveals that inward fdi amounts to more than 27 % of euro area gdp, against 22. 5 % for the united states. the euro area seems to have received, proportionally to gdp, a similar amount of fdi as china – 27. 3 % for both economies – according to imf statistics. in net terms, the stock of direct investment abroad is only slightly higher than that of fdi within the euro area ( 30. 4 % against 27. 3 %, respectively ). my fourth observation concerns bilateral fdi linkages of the euro area. based on available data, it is worth noting that the stock