labour costs among other indicators was not sustainable. therefore, i trust that this is where a surveillance framework aimed at preventing and correcting macroeconomic imbalances has to start. of course, these elements are not the only ones we have to analyse carefully. as i have said before, economic reality is much more complex than just a pure set of indicators. nevertheless such basic indicators are central for starting the analysis and for understanding the policy considerations. let me therefore briefly sketch out the key indicators that ecb staff have been selecting after reviewing and assessing the relevance of a much wider set of variables. these indicators shall provide early warning signals when macroeconomic imbalances emerge and when countries are experiencing significant losses in competitiveness, or when there are risks thereof. the seven key indicators in the view of ecb staff are as follows : a long - term measure of the growth of unit labour costs ; the stock of a country ’ s net external debt as a ratio to gdp ; the national inflation rate ; the current account deficit as a ratio to gdp ; the private and government debt ratios ; and the stock of private sector credit. these variables are all common economic indicators, they are easily available from official statistics and they are broad based. they have been selected to keep the first diagnosis as simple as possible, while still covering the most relevant dimensions of economic fitness. bis central bankers ’ speeches such a scoreboard of indicators can help focus our attention on the key issues and trigger more detailed surveillance procedures in cases in which indicators rise beyond certain predefined threshold levels. the european commission and the related council working group have been working intensively on such a framework, including an alert mechanism on the basis of a limited set of macroeconomic indicators – similar to those i have just presented – which would initiate more detailed surveillance procedures. the current discussions are based on the commission ’ s proposal for a new framework that will apply to all 27 eu member states with a preventive and a corrective arm. without going into all the technical details, let me make very clear once again which fundamental elements in its design should be improved. the ecb ’ s governing council, being responsible for ensuring price stability, has a major interest in the smooth functioning of the euro area economy. in this respect, the ecb considers it fundamental to set up an effective surveillance mechanism in the euro area that avoids the challenges that some countries are currently facing. the ecb published yesterday its opinion on the proposals made by the european commission ( ec

##b, 2011 ). it regards these proposals as appropriate for the single market, but considers that they need to be strengthened as regards the euro area. with respect to the new macroeconomic surveillance framework, the ecb calls, in particular, for the following specific measures to strengthen the framework for the euro area : first, the specific nature of membership of a monetary union should be indicated more explicitly. this should be reflected in differentiated indicators and thresholds of the scoreboard for the members of the euro area, in comparison with the other members of the european union. tighter thresholds for competitiveness indicators in the scoreboard are required for the euro area countries. the set of indicators for the euro area countries should focus on the detection of macroeconomic imbalances, and therefore they should refer to losses of price competitiveness, private and public sector indebtedness and external indebtedness indicators. they differ by nature from the much wider set of indicators reviewed to assess progress in structural reforms in the context of the europe 2020 strategy to enhance sustainable growth and employment in europe. these are the concepts that will address the “ thriving of nations in the dynamic global economy ” which i alluded to at the outset. second, a clear focus of the surveillance framework can be maintained best if only cases of macroeconomic imbalances that hamper the smooth functioning of monetary union are addressed. the framework proposed by the european commission is symmetric with respect to detecting, preventing and correcting both excessive losses as well as gains in competitiveness. i think that a totally symmetric approach misses an important point : the european union and the euro area are not closed economies. on the contrary, they are amongst the most open economies in the world. gaining more competitiveness through the improvements in one particular economy is a win - win game for all members : we are not playing a zero sum game. therefore, a totally symmetric approach runs the risk that the surveillance lacks focus and becomes distracted from the most serious challenges to the monetary union, which are significant losses of competitiveness, persistent current account deficits, unsustainable increases in asset prices, including real estate prices, and high external and internal levels of indebtedness. given the magnitude of the imbalances accumulated, the required policy action is urgent in some member states. third, a much greater degree of automatism should be introduced into the macroeconomic surveillance framework. a substantial discretionary power puts the credibility of the macroeconomic surveillance mechanism at risk, if