##ary consolidation may require an additional effort to control primary spending. the collaboration of regional and local government is vital in this connection, as they are responsible for major spending components such as public investment, health and education. this consolidation strategy should, moreover, be compatible with an improvement in the quality of public finances, since that is essential for raising incentives and for helping overcome the shortfalls in education, innovation and productivity. but when you are part of a monetary union, the most valuable economic policy instrument is, as our own experience indicates, the deepening of reforms in order to increase the responsiveness of supply and the adaptability of the business and productive sectors to the major changes the economy is undergoing, such as globalisation and population growth. specifically, the dynamism and flexibility injected into the labour market by the aforementioned phenomena of immigration and growing female participation need to be accompanied by the development of a more appropriate institutional framework, without forgoing the unquestionable achievement of good industrial relations. despite the progress achieved by labour market reforms in recent years, the need remains to better tailor collective bargaining arrangements to the different industry - and firm - level requirements and to reduce the costs associated with permanent contracts. these measures should be complemented by others aimed at improving the quality of the labour factor, by giving greater priority to educational policy in order to redress the secondary education deficit, adapt university courses to new demands and promote effective continuous training for workers. improving the efficiency of the economy likewise requires increasing investment in physical and technological capital, fostering innovation, pushing through privatisation where appropriate and stepping up the pace of the processes undertaken in recent years to heighten competition. the infusion of competition is particularly relevant in industries pivotal to spreading gains in efficiency to the rest of the economy, such as the network industries, the telecommunications market, the energy sector and rail transport. some of these liberalising measures are detailed in the national reform programme so that, irrespective of the need to design other new measures, it would be advisable to apply this programme more resolutely. also, advantage should be taken of the transposition of the services directive to define a more straightforward and competitive regulatory framework for these activities. education, innovation, market liberalisation and, broadly, all reforms geared to increasing productivity are of the utmost importance looking ahead to the long term. in recent years the welfare of spanish citizens has been increasing thanks to better use of the labour factor. this is worth celebrating since for a

differences include most notably so - called national discretions and options. on one hand, the new framework provides for a gradual transition to the new capital requirements, in line with the basel iii accord. the regulation gives countries some discretion in setting the pace of convergence towards the new requirements, which may give rise to temporary differences in the treatment of some specific aspects. for instance, a country may decide to bring forward the application of the new capital conservation buffer, initially envisaged for 2016, or the deduction of certain capital components. moreover, the regulation provides for a series of national options that might give rise to permanent differences in the treatment of specific aspects. it is logical that the ssm should work to achieve a degree of harmonisation, seeking to restrict national options of a permanent nature. it is perhaps less logical to take steps in the case of temporary discretionary arrangements, which by their very nature must disappear within a few years. different accounting practices, especially as regards provisioning, also significantly affect the uniformity of capital figures and should be a supervisory concern. it is thus reasonable to expect the ssm to contribute to convergence in the interpretation of international accounting standards. and it is essential that the ssm should strive equally to revise the calculation of riskweighted assets. that will call for a detailed review of the risk models used by banks and the adoption of corrective measures should unjustifiable deviations be detected. macroprudential policy macroprudential policy, insofar as it seeks to identify systemic risks, prevent them and increase the industry ’ s resilience, has an important role to play. the very nature of these risks is global in dimension, meaning that coordination between the various authorities with responsibilities in this field is needed. at the same time, it should be borne in mind that while the risks may be considered common to the euro area as a whole, their impact and intensity vary from country to country. this heterogeneity not only depends on the characteristics of each country, but also on the particular juncture of the financial cycle. for example, at present certain euro area countries evidence risks associated with excessive real estate market prices, while in others this risk is not discernible. macroprudential policy thus requires a coordinated approach by the various institutions, and at the same time attention must be paid to considerations of a national nature. in a monetary bis central bankers ’ speeches union like the euro area, the heterogeneity