The main driver in this last context, certainly from the point of view of those who use these systems, is the wish to reduce costs. It is often pointed out that there are thirty plus exchanges in Europe and probably at least as many settlement systems – which are linked to a greater, but often to a lesser, degree, which operate under different legal and regulatory regimes and which all incur their own running and development costs. The fragmentation also means that market participants incur indirect costs because it is harder for them to manage their liquidity and collateral efficiently. So the general message, which commands wide support, is that some serious consolidation would be in order. The question however is how to bring this about. I will not go into the technical debate about horizontal versus vertical integration, nor into the distinctions – which are nevertheless important – between trading, clearing and settlement. And there are other, less technical, influences too, including perceptions of national interest. But whatever the reasons it is proving difficult for the markets to make real progress in these areas. In the face of this, there are those who argue for some outside party to intervene and enforce consolidation. The outside party some seem to have in mind is the authorities in one guise or another. I have to say that I have doubts about the wisdom of such an approach.
The Spanish economy Spain, as I said earlier, has been one of the euro area economies that has continued to post high growth rates, compared with the relative slackness of the area as a whole. The new base-year 2000 National Accounts estimates for Spain, released a few weeks ago, indicate that its GDP grew in 2004 at a significantly higher rate than the previous estimate (3.1% against 2.7%), albeit with a more unbalanced composition. Moreover, the growth rate has remained on a mildly accelerating path, which has continued into 2005 Q1, when output stood at 3.3% compared with the same period in 2004. As indicated in the Annual Report, it has not yet been possible to analyse in depth the new National Accounts series, although the first comparisons with previous estimates indicate that both datasets offer a fundamentally similar diagnosis of the economy’s performance. In particular, the higher growth the new figures - available so far from 2000 - show has confirmed the continuity of the long expansionary phase in train since the mid-nineties. The expansion has been the result of the notable momentum of domestic demand combined with high employment-generating capacity and the extension of the supply side of the economy, two mutually reinforcing phenomena over these years which have provided a sound base for growth. Spanish euro area membership lay at the root of the significant expansionary impulses experienced by household and corporate expenditure.