8/18  There thus seems to be a need to improve the employability of this more vulnerable group notable for the presence of very young and very old workers, as well as individuals with fewer skills. To do this, it would be desirable to increase the human capital of these workers, a task which, in particular, would need training tailored to employers’ requirements. Furthermore, it should not be overlooked that the higher inequality in household income emerging in the crisis was, above all, a consequence of job destruction, which underscores the need to ensure that these people can get a job as soon as possible. In addition, the incidence of temporary employment remains very high (nearly 27% in the third quarter of 2019), which, among other things, makes for high employment volatility and reduces worker productivity. Main vulnerabilities of the Spanish economy  A second source of vulnerability originating as a legacy of the crisis is the high government debt, which in the second quarter of 2019 stood at around 99% of GDP, more than 60 pp above that in 2007. It is in this terrain where headway has been less satisfactory in the last few years, as evidenced by the fact that the budget deficit continues to have a high structural component, estimated by the European Commission at above 2.5 pp of GDP.
All but few prices are completely liberalized and driven by healthy market conditions. Fourth, in respect to so-called Ballassa Samuelson Effect, I agree with President Duisenberg, that it is mostly an empirical issue. I think the extent of this effect has been overstated and overdone in many theoretical studies. Empirical data in respect to Poland has shown, that in the past the contribution of BS Effect to the overall inflation rate has been in the range from 1% to 1.5%. As a matter of fact, BS Effect is also present in the Eurozone, in countries like Greece and Portugal. This is not the reason for, as some people heralded, a weak euro. Problems of Greece are not responsible for weak euro that is, if one thinks euro is weak. The already mentioned disinflation, limited scope for future corrective inflation, and manageable level of BS Effect make the Maastricht Inflation criteria achievable. Fiscal criteria must be met in the interest of the countries concerned, as it would contribute to their economic growth. Fifth, there is an intermediate period between the date of entry of Poland and other candidate countries into the European Union and membership of the Monetary Union. The question is, what is the optimal length of this period. I would like to point out, that it might be a rather turbulent time. BIS Review 1/2002  1  Economic forces behind convergence and rapid capital flows might create an economic roller caster.