with remaining fiscal imbalances have committed themselves to implement consolidation plans in order to reach budgetary positions close to balance or in surplus in the medium term. as part of this process, governments should put emphasis on growth - oriented consolidation policies that strengthen the productive forces of the economy. such policies are likely to be most effective when integrated into a comprehensive reform strategy based on structural retrenchment in spending. the fiscal policy framework, as laid down in the treaty and the stability and growth pact, provides a sound basis for limiting the risk of fiscal imbalances occurring. at the same time, it preserves an appropriate medium - term orientation for fiscal policy, based on realistic assumptions regarding economic developments. the governing council supports the steps taken by the commission to preserve the functioning of the framework, including the implementation of excessive deficit procedures and the issuing of early warnings, where required. turning to structural reforms, it is essential that governments intensify their efforts to expand the euro area's potential for non - inflationary growth and to reduce its high level of unemployment. the need for further progress in this field is particularly evident in a phase when the euro area economy has to adapt to a sequence of adverse shocks. indeed, such reforms, which should aim to reduce rigidities in labour and goods markets, could significantly enhance the degree of resilience of economic activity to such shocks, both in the euro area as a whole and in its regions. renewed momentum in the process of structural reform will be important to foster confidence among consumers and investors in long - term growth and employment opportunities in the euro area. this, in turn, should also have a positive effect on spending and investment decisions in the short and medium term. we are now at your disposal for questions.

and we have an exceptionally high number of vacant jobs, there is scope to cool the labour market without causing the kind of large surge in unemployment that we have typically experienced in recessions. as we use higher interest rates to cool inflation, we ’ ll be watching very closely for signs that the economy and the labour market are responding. one way to explore the needed adjustment in our labour market is through the lens of what economists call the beveridge curve. this curve depicts the typically inverse relationship between job vacancies and unemployment ( chart 3 ). chart 3 : cooling labour demand is associated with some increase in unemployment quarterly, seasonally adjusted, dotted line denotes evolution over time vacancy rate ( % of labour force ) 2022q3 unemployment rate ( % ) fitted curve ( 2011 – 19 sample ) observed values note : job vacancies for 2022q3 are based on the average of july and august from the job vacancy and wage survey. the curve is based on data from 2011 – 19. sources : indeed, canadian federation of independent business, statistics canada and bank of canada last observation : 2022q3 calculations as job vacancies decline, unemployment usually goes up. but by how much? that depends on where the labour market is along the curve. generally speaking, when job vacancies are high, as they are now, a decline in vacancies does not lead to as big an increase in unemployment as it does when job vacancies are low to begin with. staff analysis of canada ’ s beveridge curve suggests that the unemployment rate will rise somewhat if the job vacancy rate returns to more normal levels. 6 but it would not be high unemployment by historical standards. 6 the beveridge curve shifted out at the onset of the pandemic, suggesting a higher unemployment rate for any given level of job vacancies. however, chart 3 shows that this shift so what does that mean for canadian workers? well, it ’ s clear that the adjustment is not painless. lower vacancies mean it could take longer to find a job, and some businesses will find that with less demand for their products, they don ’ t have enough work for all their workers. but relieving the pressure in the labour market will contribute to restoring price stability. we ’ ll be watching a broad set of indicators to gauge the health of the labour market and how it is adjusting to tighter monetary policy. as we watch to see how the economy is responding to higher