. the public finances benefited from the lower cost of debt. the ratio of tax and social security receipts to gdp was raised by about 5 percentage points between the second half of the eighties and the second half of the nineties. public sector net borrowing was reduced below the 3 per cent limit in 1997. the restored stability of the exchange rate was not associated with acompatible trend in production costs. partly owing to the limited growth of the economy, labour productivity in both industry and services did not rise in line with that of the other industrial countries. the export competitiveness of italian products, which had improved in 1993 - 1996 as a result of the lira ’ s depreciation, began to deteriorate again. between 1995 and 2001 labour productivity in italy rose on average by 1 per cent a year ; in manufacturing the average annual increase was 1. 2 per cent. in europe in the same period labour productivity rose by 1. 4 per cent a year in the economy as a whole and 3. 1 per cent in manufacturing. in the united states labour productivity in manufacturing grew by 3. 7 per cent a year between 1995 and 2001. italy ’ s share of world exports, which stood at 4. 5 per cent in 1995 and 4. 2 per cent in 1996, has contracted steadily over the past seven years, falling from 3. 7 in 2000 to around 3. 3 per cent in 2003. french exports represented 5. 3 per cent of world trade in 1996 and were still at the same level in 2003. germany ’ s share of world exports has risen from 10. 3 per cent in 1996 to 12 per cent. italy ’ s loss of market shares is due to the relative increase in production costs and the scant importance of exports of high - tech goods. the loss of competitiveness has had repercussions on industrial activity and economic growth. between 1996 and 2003 industrial production expanded by 5 per cent in italy, by 17 per cent in the euro area. the growth the italian economy lost because of the decline in international trade competitiveness is estimated to have amounted to more than half a percentage point each year. italian industry consists of a few large corporations and a myriad of small and medium - sized firms. the 1996 census found that three quarters of manufacturing employment was in firms with fewer than 250 employees : some 550, 000 firms, or 99. 7 per cent of all manufacturing companies in italy. a significant part of this vast network of small and medium - sized enterprises is

stability. ” 11 the financial market, that is, is a fundamental mechanism of our economies ; but it is not an abstract concept. in the real world it appears as a complex infrastructure developed through a laborious process, with a set of well - specified rules of the game and the need for an attentive and vigilant supervisory system. in the same lecture tommaso returned to another recurrent theme of his, the need to move beyond the level of the “ nation state ” – in this case in order not to leave “ the rapid emerging reality of global finance ” unmanaged. and to the improvement of international cooperation and the reform of the international monetary system he devoted his last days, through the group that he convened with michael camdessus and alexandre lamfalussy – what is now called the “ palais - royal initiative ”. 12 to conclude, tommaso padoa - schioppa was a true leader, a man with whom it was always instructive to engage in a conversation, but at your own risk – always with the assignment, that is, be it explicit or implicit, of producing a concrete, real - world result. his professional life may well be compared to the work of a creative and passionate architect. he was not, and he did not pretend to be, “ always right ”. but, like the builders of the medieval cathedrals that enrich europe, he was a “ man of vision, ” a believer but also a very practical man. he was loyal to the institutions which he served but no slavish follower of received tradition. he contributed substantially, through his example, his writings, his actions, to the advancement of our society. he worked tirelessly and effectively for a better country, a better europe, a better world than the one into which he was born. “ markets and government before, during and after the 2007 – 20xx crisis ”, per jacobsson lecture, basel, 27 june 2010. palais - royal initiative, “ reforming the international monetary system. a cooperative approach for the twenty first century ”, paris, january 18, 2011. bis central bankers ’ speeches