From 2009 to 2011, euro area countries, on average, reduced the deficit-to-GDP ratio by 2.3 percentage points, and the primary deficit improved by about 2½ percentage points. Fiscal adjustment in the euro area is continuing in 2012, and it is indeed crucial that efforts are maintained to restore sound fiscal positions. At the same time, structural reforms are as essential as fiscal consolidation efforts and the measures to repair the financial sector. Some progress  2  BIS central bankers’ speeches  has also been made in this area. For example, unit labour costs and current account developments have started to undergo a correction process in most of the countries strongly affected by the crisis. However, further reform measures need to be implemented swiftly and decisively. Product market reforms to foster competitiveness and the creation of efficient and flexible labour markets are preconditions for the unwinding of existing imbalances and the achievement of robust, sustainable growth. It is now crucial that Member States implement their country-specific recommendations with determination. We are now at your disposal for questions. BIS central bankers’ speeches  3
In fact, some positive elements stand out from the evolution of the Spanish economy in recent years, such as, for example, the ability to continue to run external surpluses during the upswing, something that was not normal in previous recoveries, and which would indicate that at least part of the correction of the external imbalance is structural in nature, and is associated with cumulative improvements in competitiveness and the increase in the geographical diversification of exports and in the number of firms that regularly export to the rest of the world. This growing internationalisation of Spanish companies has served, in  7/18  turn, to stimulate business investment and employment. Indeed, more than 2.5 million jobs have been created since the beginning of the recovery. Also notable in recent years has been the deleveraging carried out by the non-financial private sector. This has reached a very advanced stage, both in the case of non-financial firms and households. For example, the debt to GDP ratio of Spanish companies has been reduced by more than 40 pp from its peak and it is now below the average level in the euro area. In the same vein, I would like to highlight the intense process of banking industry rationalisation, recapitalisation and restructuring. This has led to a more efficient allocation of capital across firms and sectors, which, as we will see later, has contributed to productivity growth.