However, as I have repeatedly said, labour reform, accompanied by liberalisation processes to foster a more competitive environment, is the only way within the context of monetary union of achieving an internal devaluation within a relatively short space of time. This reform will not have immediate effects, but that only makes it all the more pressing. Without this reform, the recovery in competitiveness could only be achieved through an extremely slow and very painful, with unacceptable suffering for many Spaniards and negative consequences beyond the purely economic ones. Turning to budgetary policy, lowering the deficit is absolutely necessary given the stance of the markets, whose distrust of the sovereign debt of the euro area countries has been increasing in recent weeks. Admittedly, tough decisions have already been taken in Spain, such as the reform of pensions, which have served to reduce the deficit not only in the short run, but also in the medium and long term. However, there is still a long way to go merely to comply in 2012 with the 4.4% budget deficit commitment, whatever the final figure for 2011. Finally, some very significant progress has been made in Spain in recent years in financial restructuring.
Miguel Fernández Ordóñez: Mechanisms to prevent and manage banking crises in the future Speech by Mr Miguel Fernández Ordóñez, Governor of the Bank of Spain, at the presentation of the report entitled “Mecanismos de prevención y gestión de futures crisis bancarias”, Fundación de Estudios Financieros, Madrid, 1 December 2011. *  *  *  The crisis still with us has seen the adoption of a broad package of financial measures at the global, European and national levels. The global response has had political backing at the highest level of the G-20. In the implementation of this response, a key role has been played by the Financial Stability Board (FSB), which has coordinated the work of numerous international institutions and committees. In Europe, in addition to the implementation of these global agreements on the continent, other worthwhile initiatives have been adopted. These include most notably changes in the supranational supervisory architecture. Finally, with regard to Spain, both the Banco de España and the Finance Ministry have contributed long and hard to implementing these global and European initiatives. But, to highlight a singular facet of the Spanish response, I should like to mention the restructuring of our financial system. I shall spare you my assessment of the numerous and substantial changes stemming from various fora that have marked progress in recent years. The authors of the book give a good account of this and, were I to repeat what they say, they might not be read.