one should downplay. 3. economic developments recent growth figures for the global economy have been rather disappointing. growth dynamics have dampened, not least in major emerging economies. the us economy contracted in the first quarter of this year due to a brief spell of poor weather. and the uk economy has also seen its growth rate shrink. the lower oil price is proving to be less of a driving force for the global economy than had been anticipated. the moderate recovery in the euro area is ongoing, however, and the economy has picked up further momentum. the latest eurosystem staff macroeconomic projections for the euro area see annual real gdp increasing by 1. 5 % in 2015, 1. 9 % in 2016 and 2. 0 % in 2017. the german economy has recovered more quickly than expected from the cyclical lull in the middle of last year and has returned to a growth path that is underpinned by both domestic and foreign demand. domestic economic activity is benefiting from the favourable labour market situation and the substantial increases in income. although foreign trade is currently being hampered by dampening global dynamics, it is simultaneously being buoyed by the euro ’ s depreciation and the strengthening cyclical recovery in the euro area. the bundesbank ’ s economists expect germany ’ s real gdp to grow by 1. 7 % this year, 1. 8 % in 2016 and 1. 5 % in 2017. a puzzling feature of the german economy is the divergence of business investment and employment, all the more so given that financing conditions are extraordinarily favourable. the weak level of business investment might be explained by the high degree of uncertainty over external developments, but it might also point to an anticipated future shortage of skilled labour. in other words : ageing tones down investment. 4. making europe more prosperous the wait - and - see stance adopted by many german enterprises is motivated not least by the modest economic outlook for the euro area. boosting growth in the euro area, then, needs to be the top priority. this would not only help the crisis countries to overcome their very difficult economic situation but also benefit all the other member states. to get to grips with the crisis, it is crucial for the troubled economies to press ahead with their adjustment process. that includes shoring up public finances ( in line with the fiscal rules of the stability and growth pact ) ; deleveraging the private sector ; implementing structural reforms and boosting price competitiveness. this, by the way

important shock absorber than public risk sharing. the integrated markets for equity capital in the us cushion around 40 % of total cyclical fluctuations between federal states. if a negative shock hits an industry or a specific region, then this loss is spread widely beyond that region. creditors, on the other hand, are not exposed to losses – except in the case of insolvency. in other words : equity is a shock absorber, debt is a shock amplifier. that ’ s yet another reason why we need to promote the integration of equity markets in europe, too. this should also include venture capital. when it comes to providing capital to innovative firms, the eu has a lot of room for improvement. in the us, for instance, finding investors is not much of a problem for innovative companies. on average, an innovative us firm can attract significantly more capital than one in the major european countries. dismantling national barriers and creating a european venture capital market would help fast - growing, fledgling enterprises to get better access to capital. while regulation has been harmonised to some extent, however, many crucial domains for venture capital funds, such as investor protection and insolvency law, remain fragmented. hence, to exploit all economic advantages of a capital market union would imply more legal changes than currently proposed by the eu commission. 4. 2 barriers to market entry another obstacle that particularly stifles growth by business start - ups is red tape. frequent administrative formalities, long approval periods or high fees make starting a business more complicated and expensive than it should be. even though an enterprise ’ s direct costs may appear to be manageable at first glance, the economic cost of difficulties in entering the market and, as a result, weaker competition should not be underestimated. for example, studies indicate that the differences between the cost of entering the market in the usa and in the eu, though relatively small, could still account for 10 % to 20 % of the eu ’ s productivity shortfall. the costs of removing red tape are comparatively low and could help strengthen growth. this holds true for many european countries – not least for germany, which ranks 106th in the global competitiveness report of the world economic forum on the question “ how bis central bankers ’ speeches many procedures are required to start a business? ” – alongside countries like ethiopia, zimbabwe, mozambique and chad. 4. 3 market integration even in the uk, i think, few would doubt that the single market has been a great