medium term fiscal positions close to balance or in surplus and ensure that they do not breach at any time the ceiling on the fiscal deficit of 3 % of gdp. it is the governing council's view that these rules are indispensable for economic and monetary union and are also in the interest of the member states. the stability and growth pact has been successful in promoting sound public finances in the euro area. as a result, 8 of the 12 euro area countries have reached budget positions which are " close to balance or in surplus ", a development which has helped to support the maintenance of price stability and growth in employment and real gdp. these 8 countries are now in a position to let the automatic stabilisers work in full, as envisaged by the pact. the other 4 countries still have to make progress to achieve the medium - term requirements of the pact. these countries now need a credible consolidation policy that will be supportive to the outlook for economic growth, as direct short - term effects on demand should be counteracted by a higher credibility for the conduct of fiscal policy, boosting confidence and thus private spending. in this regard, the full implementation of the stability and growth pact is particularly important at the current juncture. in this same vein, the euro area should implement the reforms needed to reduce the structural rigidities in its labour and goods markets. this would not only increase trend potential growth over the medium term, but also make the euro area economy more resilient to economic shocks. under the current circumstances, rapid and decisive action would be a very important contribution to support confidence in the euro area. thank you.

a strong correlation between their cost of funding and their bidding behaviour. banks without outstanding debt securities bid on average even more aggressively. overall, our internal analysis shows that the most aggressive bidders were characterised by larger amounts of debt maturing in the next three years and a shorter average maturity of the outstanding debt. the results of the bank lending survey further reinforce this interpretation. this evidence supports the governing council ’ s view that banks were facing significant funding problems and that, by removing impediments to their ability to finance the real economy, the three - year ltros helped to avoid a dangerous credit crunch in the euro area. the large injection of liquidity via the three - year ltros had an immediate impact on many market segments. by reducing concerns over the liquidity situation faced by banks and by cutting banking sector systemic risk ( which is reflected, for instance, in a sharp decline in eu bank cds premia ), the ltros contributed to reopening funding markets. in money markets, the euribor - ois spreads have reversed their widening trend from last year, by narrowing substantially, thereby suggesting that the operations have successfully lowered risk premia. more generally, the whole euro money market curve has flattened. in the secured segment, repo rates in selected euro area government bonds, which had been progressively increasing since august 2011 compared with those based on collateral from aaa countries, declined and continued to remain low, indicating that the funding of italian and spanish government bond positions in the repo market has become much cheaper. although turnover in the repo market has remained relatively subdued, there are signs of a moderate pick - up in the volume in spanish and italian markets from their levels at the end of 2011. the widespread perception of lower liquidity risk and improved capital adequacy thanks to the european banking authority capital exercise also brought a welcome reduction in us dollar funding costs via the fx swap market. us prime money market funds increased their exposure to euro area banks in january 2012 for the first time since april 2011, with an additional increase of 21 % between the end of january and mid - march, and exceeding 12 % of total assets under management. euro area banks ’ issuance of medium and long - term debt picked up in the first two months of 2012 compared with the subdued levels in the second half of 2011. in this period, euro area banks issued about €50 billion in senior unsecured debt, which is about as much as was issued in the entire second half of