, a policy of forward guidance has been adopted, involving the more accurate communication of the projected behaviour of official interest rates in the future. yet we should remember that the capacity of monetary policy to resolve the problems at the root of this crisis is very limited. what it can do, and is doing, is making time so that other players who do have the proper tools to resolve the problems can adopt the measures needed, and so that such measures may take effect. the other european economic authorities, starting with the commission, have – in close collaboration with national governments – taken significant steps towards correcting the weaknesses exposed in the euro's institutional arrangements. thus, a permanent mechanism, the european stability mechanism, has been set up, with the capacity to provide funds to the member states deprived of access to the capital markets. and an ambitious reform of overall economic governance has been launched, strengthening the mechanisms to align national economic policies with the aims of the union as a whole and designing a plan to move towards a deeper and sounder union in four stages : banking union, economic union, fiscal union and, finally, political union. highly significant progress has already been made in the first of these four areas. in november next year the new single supervisory mechanism will begin to operate within the ecb, and it should be complemented by a single bank resolution system and, later, a single resolution authority and a common resolution fund although, as is known, these latter steps pose complex legal and political problems that might delay their effective start - up. national governments, too, have reacted within their remit. on one hand, to contain the worsening of public finances, one of the main imbalances underlying the european strand of the crisis. and on the other, to make markets more flexible and to promote investment, growth and employment. since late last year the quantitative and, above all, the qualitative indicators have improved markedly. in the second quarter this year, there was a year - on - year increase of 0. 3 % in euro area gdp. this positive figure has put an end to six consecutive quarters of contraction. the rise in output has been across the board, spanning both domestic and external demand. looking ahead, the estimates available indicate that gdp in the euro area will grow once more in the third and fourth quarters of the year, albeit at moderate rates, underpinned by the improved international setting and by an accommodative monetary policy, both of which bis central bankers ’

the final stretch of the year in compensating for the recovery by civil servants of their extra payroll should also be recalled. let me now discuss the main items of the budget for 2014. since my appearance in parliament in early october, the overall information available on general government budgetary programming for 2014 has increased. this is most notably the case with the so - called 2014 budgetary plan, devised by the government in compliance with its reporting obligations to the european commission, derived from the legislative package on budgetary oversight approved last may. the plan includes information on overall general government revenue and expenditure for 2014, based on the draft budgets not only for central government and the social security system, as was habitually the case, but also for the regional governments. this information is necessary for making a proper assessment of the budget projection in spain, given the high degree of decentralisation of our public sector : in 2012, central government was responsible for 27 % of total consolidated public spending ; the social security system for 32 % ; the regional governments for 30 % ; and local government for 11 %. as i indicated here a year ago, this budget plan marks an important step forward : over time, this document is destined to play a key role in the overall programming of total public spending, with the dual aim of making the budgets of the different tiers of government consistent and offering this information in an accessible and transparent fashion to the public at large, analysts and institutions. the macroeconomic figures accompanying the 2014 budget project real gdp growth of 0. 7 %, as a result of the positive 1. 2 pp contribution of the external sector, offset in part by the negative contribution of national demand. these forecasts are prudent and in line with the above - mentioned central growth scenario and, broadly, with what may be inferred from the consensus reached by analysts. the deficit targets for 2014 are well - known and match those approved by the european council last july. the overall general government deficit should stand at 5. 8 % of gdp, 0. 7 pp down on the forecast for 2013. in terms of agents, an improvement of 0. 3 pp of gdp is considered for social security funds and the regional governments, to 1. 1 % and 1 %, respectively, while central government might post a deficit of 3. 7 % of gdp, compared with the figure of 3. 8 % projected for 2013 ; local government should run a balanced budget. the target for 2014 entails an improvement in