best insurance against having to endure swift and painful adjustment in the face of imminent danger is to conduct sound fiscal and structural policies. this means building up buffers and efficient structures in good times so that a member state never ends up in such a situation again. this is, first and foremost, the responsibility of the member states themselves. it also means that the excessive deficit and the excessive imbalances procedures must be enforced thoroughly. more generally, we saw that the lack of an adequate governance framework at the european level considerably narrowed the policy options available once the crisis hit. only when a new institutional set - up was built up, step - by - step, did more and more options become available again. this leads us to an important lesson : to collectively retain sovereignty, member states need to share sovereignty. we have come a long way since 2010 in this regard, in particular with the step - by - step establishment of a banking union, but we are not there yet. i am sure that your institution will continue to play an essential role in this process, as it repeatedly has in recent years. the troika in its current form will not be there forever. i am convinced that in the long term, europe ’ s crisis management framework should be brought under the single umbrella of community law. but there is no short term alternative and as long as it is sought, we will continue to contribute our candid advice, learning from experience. i thank you for your attention and i am now looking forward to your questions. bis central bankers ’ speeches

second, repairing and restructuring the financial sectors to put them on a healthier footing ; third, regaining competitiveness by pursuing structural reforms. when giving advice as part of the troika, we always attached importance to ensuring social fairness. this meant, in particular, an equitable sharing of the adjustment burden across society and overcoming powerful vested interests. i am acutely aware of the social hardship in the programme countries. many citizens have suffered and are still suffering from policy mistakes in the run - up to the crisis and the subsequently unavoidable adjustment process. these are real people losing their jobs. real people getting their wages or pensions cut. this concerns all of us. but we should not jump to the wrong conclusions and blame the fire brigade for the fire damage. let us always keep in mind what would have been the alternative. a disorderly default would have resulted in a meltdown of the financial sector and in a collapse of the real economy. social hardship would have hit the citizens of the programme countries much harder. and let us also not forget that in one case there was an extensive debate on the potential exit from the euro area. instead, what have we experienced these last four years? tremendous efforts have been made to repair financial sectors, improve the functioning of the economy and consolidate public finances. that ireland has just exited from its programme and regained market access is a demonstration of this hard - won achievements. in all the programme countries we have seen major progress, especially as regards fiscal adjustment and the stabilisation of banking systems. cost and price competitiveness are being regained step by step ; structural reforms are showing first results. market access has improved. nevertheless, unemployment remains unacceptably high and the recovery is fragile. therefore, governments should not undo the progress made. instead, they should keep bis central bankers ’ speeches going down this difficult path. incidentally, this applies not only to the programme countries, but to all euro area member states. lessons to be learned i would like to draw three conclusions from what i just explained. first, the programmes were the necessary answer to some member states finding themselves on the brink of default. second, the troika was the best available instrument in the given circumstances. and third, with hindsight and taking into account the difficult situation as well as the imperfect information available at the time, the troika has provided sound advice. where does this leave us? i believe the experience of the last four years offers some important lessons. the