that the fragmentation of euro area credit markets declines further and that the resilience of banks is strengthened where needed. the ecb ’ s comprehensive assessment before it adopts its supervisory role under the single supervisory mechanism will further support this confidence - building process. it will enhance the quality of information available on the condition of banks and result in the identification and implementation of necessary corrective actions. further decisive steps to establish a banking union will help to restore confidence in the financial system. to sum up, taking into account today ’ s decisions, the economic analysis indicates that we may experience a prolonged period of low inflation, to be followed by a gradual upward movement towards inflation rates below, but close to, 2 % later on. a cross - check with the signals from the monetary analysis confirms this picture. bis central bankers ’ speeches as regards fiscal policies, the euro area budget deficit is projected to decline further from 3. 1 % of gdp in 2013 to 2. 5 % in 2014, according to the european commission ’ s autumn 2013 economic forecast. at the same time, the euro area government debt ratio is expected to rise from 95. 5 % of gdp in 2013 to 95. 9 % in 2014. in order to put high public debt ratios on a downward path, governments should not unravel their efforts to reduce deficits and sustain fiscal adjustment over the medium term. the composition of fiscal consolidation should be geared towards growth - friendly measures which have a medium - term perspective and combine improving the quality and efficiency of public services with minimising distortionary effects of taxation. governments must also decisively strengthen efforts to implement the needed structural reforms in product and labour markets. progress has been made in reducing current account deficits and unit labour cost differentials, but substantial efforts still need to be undertaken with a view to further improving competitiveness, supporting rebalancing within the euro area and creating more flexible and dynamic economies that in turn generate sustainable economic growth and employment. we are now at your disposal for questions. bis central bankers ’ speeches

doing that. this is an issue all our societies need to look at carefully. the ecb ’ s role in that is to maintain price stability, which prevents unfair redistribution. for example, our research shows that in the euro area too low inflation results in redistribution from younger, more indebted households to older households that are typically net creditors. current retirees are wealthier than ever. what opportunities does this bring to europe? in an ageing society, the fact that retirees are getting wealthier isn ’ t necessarily abnormal – older people need to accumulate more wealth to finance living longer. as they spend their wealth during retirement, it passes back to the younger generations. so wealth creation isn ’ t a zero sum game. what matters is that young people, as they move through life, have the opportunities to build up wealth, too. do you think younger adults today will have as good a standard of living as pensioners today when they come to retire? bis central bankers ’ speeches that ’ s our common choice. our standard of living depends on the strength of our economy. we need a more open, flexible, innovative and business - friendly society. much focus is put on the central bank to raise growth, and it can contribute through price stability and a stable financial system. but in the long run real growth is driven by what the economy can produce. that is much more about ideas, technology, flexibility, motivation, skills. it is up to elected governments to set a growth - friendly environment. you often talk about the need for “ structural reform ” in employment. what do you mean by this? there are lots of forms this can take. just to give one example, the kurzarbeit scheme in germany allowed employers to adjust working time during the crisis without firing people. but there ’ s no one - size - fits - all model. every society has its challenges and preferences. the idea generally is to create a fair and flexible labour market where companies do not fear taking on staff when they need them and specific groups of people are not structurally disadvantaged at times when employers need to cut wage bills. what can central banks / governments do to ease / resolve these issues? everyone has a vital interest in a prospering economy. so bringing down high levels of youth unemployment is a priority for everyone. as i said, the best contribution central banks can make here is to live up to their mandates. we can only encourage elected governments to take the necessary steps to create jobs and make