greece and portugal, but also in some large euro area countries, notably spain and france. as consequence, sizeable and persistent structural adjustment will be necessary in most euro area countries to put debt back on a declining path and reduce it to a sustainable level, in line with the 60 % of gdp debt criterion of the stability and growth pact. however, most advanced economies face substantial fiscal consolidation requirements. notably, for the us, the imf estimates that general government gross debt will reach 100 % of gdp in 2011 and that it will continue to rise through the year 2016. at the same time, the general government deficit is expected to remain close to 10 % of gdp in 2011 ( slide 12 ). as you can see from the slide, significant aggregate structural adjustment of 1 percentagepoint of gdp per year will be necessary in the euro area to reduce the debt ratio to below 60 % of gdp by 2030. for the us, even such a relatively ambitious adjustment path would keep the debt - to - gdp at around 75 % of gdp by 2030. these scenarios highlight the significant fiscal challenges we are facing on both sides of the atlantic in the aftermath of the financial and economic crisis. in european countries, the correction of excessive deficits is on its way. the pace of fiscal adjustment has been set by the european council in a way that reflects country - specific imbalances. most countries will have to reduce their deficit ratio to below 3 % of gdp by 2013 at the latest. accordingly, euro area member states have presented medium - term consolidation strategies in their stability programmes which point to a strongly expenditurebased adjustment. such an approach is warranted in view of strong increases in government spending during the crisis in most countries. moreover, past experience suggests that successful consolidations typically have a strong expenditure component. in addition, case study evidence from previous consolidation episodes indicates that ambitious expenditure reform was typically carried out in the context of a broader economic reform programmes, comprising structural reforms to promote potential growth and institutional reform, e. g. to strengthen the budgetary framework. in fact, many euro area countries, notably the ones subject to eu / imf programmes, are following such a strategy which i would like to call the european approach to fiscal adjustment. if effectively implemented, such reform programmes would enable countries to address their sustainability risks and, at the same time, limit potential short - term costs of fiscal tightening through growth - enhancing structural reform. especially in the current environment of heightened market sensitivity, ambitious reform efforts

’ s comprehensive assessment should support a further stabilisation of credit flows. to sum up, a cross - check of the outcome of the economic analysis with the signals coming from the monetary analysis confirms the need to closely monitor the risks to the outlook for bis central bankers ’ speeches price developments over the medium term and to be prepared to provide further monetary policy accommodation, if needed. monetary policy is focused on maintaining price stability over the medium term and its accommodative stance contributes to supporting economic activity. however, in order to strengthen investment activity, boost job creation and raise productivity growth, other policy areas need to contribute decisively. in particular, the determined implementation of product and labour market reforms as well as actions to improve the business environment for firms need to gain momentum in several countries. it is crucial that structural reforms be implemented credibly and effectively as this will raise expectations of higher incomes and encourage firms to increase investment today and bring forward the economic recovery. fiscal policies should support the economic recovery, while ensuring debt sustainability in compliance with the stability and growth pact, which remains the anchor for confidence. all countries should use the available scope for a more growth - friendly composition of fiscal policies. the investment plan for europe which the european commission announced on 26 november 2014 will also support the recovery. we are now at your disposal for questions. bis central bankers ’ speeches