by side. while literacy may turn a poor man into a rich man, illiteracy, on the other hand, may conduct a rich man into misery. finances are dangerous when you are not financially literate enough. that is why i consider this conference as highly important. the bank of albania has devoted constant attention to financial education. our education agenda is integral and comprehensive both in terms of geography and age groups, full of interactive elements and modern communication methodology. furthermore, i would like to refer to some of the elements that constitute the philosophical grounds of our educational work. bis central bankers ’ speeches first, i would like to recall that financial welfare is inextricably related with the country ’ s economic progress. it has been already proven that individual ’ s welfare is proportionate to economic activity and prices of financial assets. the cause - effect relation is true on both directions. our economy and financial institutions are strong when revenues and wealth grow. financially healthy individuals are inclined to increase their consumption and, therefore, boost their spending, consequently pushing the economy forward. moreover, financially successful people boost lending potential by channelling their savings into deposits. therefore, they are in a position to have access in crediting by the banking system, giving life to new businesses which, in turn, provide higher employment and welfare. to most of the people, having a job and a salary or estate is essential to personal financial welfare. however, the fact that you may have a job, or a salary does not imply that you automatically have the capacity to make wise decisions on effective money utilisation. this is the point where our relation with financial education is subjected to the test of the truth. is this test passed? the sub - standard credit crisis in the us revealed that individuals in most cases did not manage to pass this test. consequently, the debt load on individuals grew even heavier, while access to crediting became tighter, resulting in a big risk for their financial future. a similar analogy may be drawn for lending in foreign currency in some eastern european countries. secondly, financial education should be seen as a public good that brings about positive externalities to the society. it not only increases individuals ’ financial welfare, but also affects directly economic policy efficiency undertaken by relevant authorities. the more - educated the public, the higher economic policy efficiency is. maintaining inflation and economic activity under control is almost impossible in a society ailing from financial illiteracy. macro - economic balances are achieved and maintained through monetary and fiscal

the forecasts published recently by the commission point to a broadly unchanged situation in the euro area in 2006 and 2007 ; deficit ratios are expected to remain at around the 2005 level of 2. 4 %, while debt ratios, after declining only marginally, are forecast at levels still above 70 % of gdp. this is disappointing against the background of the economic outlook. most countries with an excessive deficit have not corrected their position in a timely manner. furthermore, there is a risk of consolidation delays in other countries. it is crucial to avoid the mistakes of the past, when many countries failed to consolidate sufficiently in good times. the governing council considers that more determined progress is required towards sound public finances in a number of countries, that concrete and credible measures should be implemented swiftly as part of a medium - term - oriented strategy, and that it is vital to consolidate confidence in the revised stability and growth pact by ensuring the sustainability of public finances in the euro area. in terms of structural reforms, the governing council reiterates its call for the implementation of firm measures to ensure open, competitive and well - functioning product and labour markets, so as to foster an attractive environment for investment and innovation and to promote flexibility in wages and prices. there is a broad and firm consensus that such reforms are beneficial in promoting growth and employment and in enhancing the resilience of the euro area economy to external shocks. at the same time, these reforms would further facilitate intra - euro area adjustments by reducing rigidities that contribute, in some economies, to wage developments that lead to high and persistent unit labour cost growth, higher inflationary pressure and losses in competitiveness. examples of such rigidities are low productivity growth due to a lack of competition in some sectors and an explicit or de facto indexation of nominal wages to prices. all in all, a comprehensive set of reforms is essential to strengthen the foundations for sustained growth in output and employment across the euro area, to underpin the ongoing economic recovery and to further smoothen the functioning of adjustment mechanisms in the euro area, thereby facilitating the conduct of the single monetary policy. we are now at your disposal for questions.