Not only is the share of young people declining in the euro area, but unfortunately, despite being the best-educated generation ever, they have more trouble in entering the labour market. Youth unemployment exceeds overall unemployment in all countries and for the whole area the difference is a staggering 12 percentage points. This is already harming the economy, because the young who are willing to work but unable to find a job are prevented from developing their skills. To avoid creating a “lost generation” we need to act quickly. The younger generation is also being dragged down by the high level of debt it is set to inherit. A combination of negative demographics, weak productivity growth, poorly functioning labour markets and a steep increase in public and private sector debt burdens means that a dwindling number of young people in our societies will have to carry an increasingly heavy financial burden[15]. This limits their ability to be entrepreneurial, to innovate and compete in international markets. The good news is that a lot can be done to improve that gloomy outlook[16]. Today, I won’t be talking much about fiscal reforms, or about policy initiatives that could improve the demographic outlook, but I will instead focus on reforms that could boost medium- to long-term growth and employment. Comprehensive and well-sequenced reforms When you look at a range of OECD structural indicators, it is clear that most euro area countries are well down the league table for best international practice in one or several policy areas.
The maximum bid amount and rate have varied over the life of the exercise in order to ensure usage sufficient to generate useful observations about counterparty demand under various market conditions during the testing period; however, as authorized by the Committee, they cannot exceed $ billion per counterparty and 5 basis points, respectively.18 It bears emphasizing once again that, like the Federal Reserve’s other  16  The facility does, however, raise new collateral management issues for the Desk, which would have to ensure that SOMA securities are appropriately allocated to meet policy and operational needs across multiple operations. 17  The Desk has been conducting periodic, small-value term reverse repo exercises with its expanded counterparties through tri-party arrangements since October 2009. These exercises have been limited to $ billion in total amounts outstanding and have been conducted according to the traditional, fixed-quantity model of Desk operations. In August 2013, the exercises were arranged for same-day settlement and overnight maturity in anticipation of initiating overnight fixed-rate reverse repos. 18  All 139 counterparties are eligible to participate, but they are able to choose whether they do so. Each counterparty was initially limited to a maximum bid of $ million. This amount was raised to $ billion on September 26, after we ensured that the initial launch of the exercise did not operationally overwhelm the  8  BIS central bankers’ speeches  operational readiness exercises, this one is a matter of prudent advance planning.