So it is simplistic to assume that Germany becoming less competitive would automatically help others – it may indeed harm them. The solution to rebalancing is for other countries to become more competitive, not for Germany to become less so. We need to maximise competitive pressures within Europe to achieve higher efficiency, innovation and productivity growth. And thanks to the structural reforms that are taking place, this is actually what we are seeing. For example, since 2011 Portugal’s export market share has increased by 11 percentage points and Spain’s by 8 percentage points. At the same time, I see a vital need for new investment in Germany. Investment is still around 1 percentage point of GDP lower than it was in 2007, and in that year Germany already had the lowest investment ratio in the euro area. To raise investment we need structural reforms in Germany as well – for instance to liberalise the services sector – thus creating a virtuous circle of higher potential growth and better investment opportunities. And by definition, if more German savings were invested at home, the current account surplus would also fall. To conclude, I do not see the current decade in the euro area as “lost” – I think it is being used well. The decade of adjustment we are facing now is to correct the mistakes of the previous decade. But in the process, I trust we are fixing our problems at the root.
Looking forward to 2014, the key challenge is to stay on this path to create the fastest possible rebound in growth and job creation. This entails building a genuine banking union with a strong single resolution mechanism; it entails finding new ways to support structural reform implementation, for instance through so-called reform contracts; and it entails deepening our political union to ensure full legitimacy in the eyes of citizens. All this requires effort and determination to achieve – but it is well within our reach. BIS central bankers’ speeches  3