higher sustainable growth, the pursuit of far - reaching structural reforms is essential. major reforms are particularly needed in those countries that have experienced competitiveness losses in the past or that are suffering from high fiscal and external deficits. measures should ensure a wage bargaining process that allows wages to adjust flexibly to the unemployment situation and losses in competitiveness. reforms to strengthen productivity growth would further support the adjustment process of these economies. we are now at your disposal for questions.

the effort in conducting this exercise. all these statements are mere speculation. the comprehensive assessment is an extraordinary opportunity to rebuild confidence in the banking sector and promote the long overdue repair of bank balance sheets, which in turn is a precondition for a sustainable economic recovery. one particular point needs to be stressed : credible national backstops must be put in place. if not, the credibility of the whole exercise is put at risk as the outcome will then almost certainly be negatively perceived by market participants. doing this balance sheet assessment without a backstop in place would be a bit like getting on a boat in rough weather conditions, and not taking a life jacket on board. any recapitalisation needs uncovered by the exercise should of course first and foremost be covered by the market. national budgets and national resolution funds may intervene as a second line. finally, a european backstop, the esm with its existing instruments, meaning a banking sector programme like in the case of spain, may be available. the second key element of a banking union is the single resolution mechanism, a european equivalent to the federal deposit insurance corporation. the crisis has shown that simple coordination among member states has been inadequate to organise the resolution of crossborder banks in an efficient, quick and least - cost manner. the single resolution mechanism contains three essential elements : first, a single regulatory framework. this will be established with the bank recovery and resolution directive ( brrd ). the trilogue of the council, the european parliament and the commission is currently ongoing and from an ecb perspective a desirable trilogue outcome would contain two elements. first, bringing forward bail - in to 2015 as markets will anticipate bail - in anyhow. having the rules in place earlier will give investors ’ bigger security. second, the flexibility and scope for national solutions should be somewhat reduced so that market participants will have sufficient confidence about the rules of the game in europe. the second element of the single resolution mechanism is the single resolution authority and the third, a single resolution fund, funded by contributions from the financial industry. the last two elements are currently in the legislative process and we strongly support the envisaged timeline for their entering into force ( 1 january 2015 ), as it ensures that the establishment of the single resolution mechanism would follow shortly after the effective start of the single supervisory mechanism. private banking union the “ private banking union ” in the us is created by its integrated financial market, which includes both the banking sector and capital markets. in the