performance of the euro area has been remarkable. first, the standard deviation of euro area inflation, equal to 0. 5 per cent, has been the lowest of the sample, with only switzerland and japan close, but slightly higher. second, the volatility of output growth, at 1. 1 per cent, has been the second lowest of the sample after the united kingdom, which has however exhibited a markedly higher volatility of inflation, equal to 0. 9 per cent. third, the comparison with the united states – which, being a monetary union of roughly similar economic size, provides the most natural benchmark – is uniformly positive, with the u. s. volatilities of inflation and output growth equal to 0. 9 and 1. 2, respectively. the evidence reported in figure 3 therefore suggests that the stabilisation of the nominal side of the euro area economy has not been achieved at the expense of the real side. rather, the opposite appears to be true, with both the real and the nominal side exhibiting an excellent performance from an international perspective. indeed, macroeconomic stabilisation has been accompanied by a remarkable performance in terms of job creation. first, from january 1999 until the end of 2007, the number of people employed in the euro area has increased by 15. 7 million, compared with an increase by only about 5 million during the previous nine years ; second, under emu the unemployment rate has fallen to its lowest level since the early 1980s. the improvement in euro area labour market ’ s performance reflects corporate restructuring, wage moderation in most countries, and – crucially – the progress made on structural reforms associated with the lisbon process. as i will come to in a moment, a lot of progress in this dimension is – of course – still possible and needed. specifically, beyond the euro area we have considered all countries for which we could find at least seven years of data in the international monetary fund ’ s international financial statistics database. a further benefit of the introduction of the euro has been the strengthening of trade and financial linkages across euro area countries. first, the sum of intra - euro area exports and imports increased from around 31 % of gdp in 1998 to about 40 % in 2007. second, the euro has been fostering a gradual portfolio reallocation away from holdings of domestic financial instruments, and towards holdings of financial instruments issued elsewhere within the euro area. euro area cross - border holdings of long - term debt securities, for example, have

is more apt at fostering new and dynamic firms willing to reap the benefits of opening markets and to pursue creative or innovative ventures. finally, a key requirement is for firms to be able to access relatively easily the finance they need. from this point of view, the euro area significantly lags behind the united states, with its venture capital financing, expressed as a fraction of overall gdp, being equal to a fraction of what it is in the u. s. turning more specifically to the labour market, the comparative rate of growth of working - age population is one of the key factors explaining differences in real gdp growth between the euro area and the fastest growing industrial economies. over the last two decades, for example, the average contribution to real gdp growth from growth of the working - age population has been approximately 0. 8 percentage point higher in the united states than in the euro area. looking ahead, the euro area faces the prospect of an ageing population, so that the labour force could become an important constraint on trend growth. turning to labour utilisation, in spite of subdued growth in working - age population, over the last ten years there has been a significant increase in the total number of hours worked in the euro area. this stands in contrast to developments in the united states, where a small deceleration has taken place. a significant portion of the acceleration in the euro area can be explained by an increase in labour utilisation, and in particular by improvements in both participation and employment rates. despite this progress, however, there is still room for improvements in the workings of european labour markets. first, the employment rate in the euro area is still low by international standards. second, the rate of unemployment in the euro area is still high, in particular in some individual countries. in particular, whereas the employment rate for prime - age males in the euro area is comparable to that in the united states, significant disparities between the two areas remain concerning the youth, female and older segments of the labour force. for example, in 2007 the female employment rate was 58 per cent in the euro area, compared with 66 per cent in the united states, whereas the employment rates for older workers were 43. 3 and 61. 7 per cent, respectively. finally the youth employment rates in the two areas were 38 and 54. 2, respectively. in spite of significant achievements in job creation over the most recent years, both the still comparatively high unemployment rates in the euro area, and the