##sation, more competition, a greater weight of the private sector in the economy, etc. to increase their growth potential. and, on the other, the countries with more inflationary tendencies should, as i said a couple of weeks ago in zaragoza, pursue their own structural reforms, reforming labour institutions, the rental market, etc. so that increases in demand, arising from relatively low rates, cannot generate inflation. the celebration of these ten years is taking place just as the global macroeconomic scenario has undergone a deep - seated change as a result of the financial crisis, leaving it covered in great uncertainty and powerful recessionary tendencies. now, those who are against a single monetary policy underscore the uneven impact that changes in the world economy can have on euro area members, as these are deprived of the macroeconomic stabilisation instrument that national monetary policies provided. once again, this is not an argument against emu but one in favour of accelerating structural reforms. but let us first highlight the huge benefits of emu precisely in the current crisis. can anyone imagine how the 16 euro area countries would have weathered the international financial storm had they retained their 16 currencies? anyone can appreciate the scale and seriousness of the financial problems these countries would have faced had each one retained its currency. remember what happened in the early 1990s when the effects of the us recession took some time to be felt in europe, but eventually did so with unusual virulence. amid the serious challenges arising from german reunification, the lack of a coordinated monetary policy response on this side of the atlantic then led to massive speculation against exchange rates and to a major foreign exchange crisis, which some did not hesitate to call the collapse of the european monetary system. this speculation ultimately imposed enormous costs for all the countries involved. this will not happen again now. at this time of enormous uncertainty, the key institution of the monetary union, the ecb, has reacted in an exemplary fashion. in the space of five months it has managed to reduce the euribor from 5. 3 % to 2 % through changes in monetary policy, despite the increases in spreads arising from the financial crisis. and it has further adopted a policy of unlimited liquidity provision, in coordination with other central banks, as illustrated by the agreements for liquidity provision in currencies other than the euro. the other european economic authorities have also reacted forcefully to support the financial system, to safeguard its functioning and to stimulate the various economies. amid these global difficulties, cooperation and

close to 5 % in 2018, in line with spain ’ s peers, compared with 12 % pre - crisis. the reduction in housing investment activity came about in parallel with a decline in house prices which, despite the growth observed in recent years, remain in real terms some 32 % below the nationwide levels observed in 2007, albeit with some cross - regional dispersion. all these developments better position this sector to support economic growth, as indeed has been the case in 2018. the weight of non - residential construction, for its part, has also diminished considerably, largely reflecting the impact of the reduction in public - sector investment spending. beyond these improvements, as i stated in my introduction the spanish economy remains prone to certain vulnerabilities and faces significant challenges, which i shall now set out. first, despite the notable above - mentioned reduction in private debt in recent years, on the latest available data for 2018 q3 the negative net international investment position ( iip ) of the spanish economy stood at 81 % of gdp, and that of gross external debt at 168 % of gdp, levels that are high in relation to other advanced economies and which mark a factor of vulnerability for the economy as a whole. the reduction in the iip to less vulnerable levels will require running current account surpluses for a prolonged period. the continuation and deepening of the gains in the economy ’ s competitiveness posted in recent years should, along with healthier public finances, contribute to entrenching a sustained path of external surpluses. closely related to the foregoing point, the second factor of vulnerability of the spanish economy is that arising from the imbalance in public finances. the sectoral breakdown of the net iip shows how, since the onset of the crisis, the general government ’ s net liability position has increased notably, with the liabilities position of the monetary financial institutions and the rest of the resident sectors declining. despite the considerable reduction in the budget deficit relative to gdp from its peak of 11 % in 2009 to 23. 1 % in 2017, spanish public finances continued to evidence a high level of structural deficit ( estimated by the european commission to be 3 % of gdp, the highest in the euro area ) and of public debt, which currently stands at around 98 % of gdp. against this backdrop, it is worth bearing in mind that maintaining a very high level of public debt over a prolonged period may not only hamper economic growth but also lessen the stabilising capacity of fiscal policy in