Trade balances havele also improv improved. In most cases this improvement has resulted from a combination of a relatively strong export growth particularly in spain and portugal, and very weak or negative import growth notably in greece. The contraction of domestic demand continues to play a role in this adjustment. Part of this is cyclical. But it also reflects rebalance from previously unsustainable domestic demand growth. Demand has to be contained and sbla h supply has to be increased. Supply adjustment takes more time. There are also signs that competitiveness gains have contributed to recent improvements in current accounts. Exports have held up relatively well in view of the weakening of external demand. Exports of goods and services have increased by 22 in volume for spain since 2009, and by 15 for ireland, 22 for portugal, 19 for italy. More importantly, some countries that lost export shares before the crisis has since registered positive perform arranges notably spain and portugal. This shows improvements in cost competitiveness and dwaynes in export market shares in most of the countries where the immediate for adjustment is largest. The downward adjustment of unit labor costs is proceeding in these countries. The countries with the largest imbalances have notably recaptured some of the losses in competitiveness incurred previously. All this is welcome, but it would have been preferable if these adjustments had occurred before the eu imf programs had to be put in place in some of these countries. The gains in cost competitiveness responded only to adjustments in relative wages. Productivity matters. In low productivity sectors, labor shedding as increased aggregate productive, particularly ireland and spain. We expect the progress in structure reforms especially those that improve the function of the labor markets and product markets will add lower unemployment and facility new employment opportunities. The reform momentum has been 34r5 particularly pronounced in some countries which many cases coincide with those countries that face the largest adjustment needs. Despite the adjustment in relative unit labor cost, the overall price adjustment, however, has been much less pronounced. And there is clear evidence that increasing profits contributed to a large extent to upward pressures on prices in some countries. It is of paramount importance to address the lack of competition in a number of areas with strong vested interests. This is imperative to ensure that the flexibility of wage costs translates into the necessary gains in price competitiveness. This is true in particular for the Service Sector that had been most shielded from competition. What more can be done to maintain the positive performance momentum and to integrate those parts of the euro area that are lagging behind . Some euro area countries are not taking full advantage of their well educated labor forces and their potential in terms of innovation and global reach. They could greatly benefit first maintaining a growth friendly business environment, and they could greatly benefit from reinventing their production structure, upgrading quality, and redistricting their exports towards strongly growing markets. Innovation is crucial in this respect. This means for a start that where Profit Margins are restored, they should serve to Fund Research and development to higher extent. But innovation potential is not always translated into actual marketable employment creating and growth sustaining innovation. What is key in translating potential is the regime of economic incentives. And it is indeed this system of economic incentives that the current waiver of Structural Reforms in the euro area is addressing. Central challenge is to set conditions so that the skills of the labor force especially of our young people can be profitably employed in competitive firms or in the new enterprises that will go on to set up. In this vain, removing rigidity clearly races the potential for growth and job creation. And this of course, the resumption of growth, is fundamental to returning toward a sustainable fiscal position. Concretely, we must identify the bottlenecks that prevent the vast resource of the euro area being used most fruitfully. The world banks latest doing Business Report highlights greece as one of ten countries that have most improved the ease of doing business from a rather unfavorable level. The momentum is clearly going in the right direction, although much remains to be done. Spain and portugal were among the countries that marie solving insolvent firms easier. Crucial agreement for restructuring the economy in this transition period as resources must shift from unproductive to productive activities. It is the latter that create jobs. This reallocation process, though sometimes painful in the short run, ill say always painful in the short run, carries the seed of future prosperity. A growing body of knowledge shows that by increasing the ability of the economy to adjust so that factors can be reallocated to the most competitive firms, aggregate Labor Productivity can increase substantially. Some studies indicate a gain of as much as 20 force 30 . The current focus on competitiveness in france leading towards an institutional and fiscal set up that can support firms investment in innovation is therefore a welcome step in the right direction. Another important aspect is the growth and competitiveness enhancing potential of further market integration in europe. One example is a very recent study which finds that applying the eu patent would raise the gains for european firms from patent and inventions by 60 . Furthermore, those gains would more than double with best practices. I quote this example to show that improving competitiveness in europe does not imply a race between euro area countries but rather the exploitation of their competitive advantage in the Single Market and a Global Economy that offer far greater growth possibility than each economy on its own. Youre watching worldwide exchange. Im kelly evans and these are your headlines. Draghi uses his speech to turn up the heat on eurozone governments telling leaders into the to rely on the ecb to stabilize the currency bloc. Germanys finance minister warns a greek default could spell the end of the euro as the countrys lawmakers prepare to vote on new funds for athens. And japan posts surprisingly Strong Industrial output this october and the government announces a 10. 8 billion stimulus package. Tokyo stocks end the week at a seven month high. Plus president obama will take his case for tax hikes on the wealthy to the American People today as the war of words between democrats and republicans over the fiscal cliff heats up. The trading session sitting roughly flat on the stoxx 600. Decliners and advancers about even this morning. Markets are trying to digest these comments from draghi. First, lets take a look at the bourses. S it is the last trading day of the month. Just one left to go in this extraordinary 2012. Ibex 35 appropriately enough is ending in the red today. Other indexes showing a little bit of a rise here. Weve seen spanish and italian debt come in sharply and the yields falling today. We saw the eurodollar adding almost 0. 3 s this morning. Dollaryen up two thirds of a percent in the light of perhaps japan may be getting moring a yes, sir sif on st ing a grefs saggressive on stim. Lets get over to deidre wang morr morris. Yes, the japanese data was good, but also the economy still stuck in deflation. Hang seng down half a percent. We had pic stay in focus, not listed yet, but supposed to ipo on december 7th. They priced the range at the moment of their indicative range. It will be a 3. 1 u. S. Billion dollar ipo and that would be hong kongs largest in about two years. Looking at some of the other markets, the kospi finished with somes losses down 0. 1 . Asx finishing up 0. 6 . Lets get over to the november performances because it was a pretty good showing for the month. Nikkei of course the outperformer. Kelly mentioned the yen. It has been weakening against the u. S. Dollar and that has been providing a lot of support. Also directly related to politics in japan. This has been in focus over the last month or so. Opposition leader expected to be the next Prime Minister when the country votes. So he has been talking about a lot of aggressive monetary easing and talking about an inflation target of about 2 . So stocks have really been on a roll. The kospi finishing up with just about 1. 1 gain in november. We have the asx finishing just slightly lower about a quarter of a percent. And the hang seng continues to win finishing i believe a third month of gains up 1. 8 in the month of november. And shanghai composite finishing down 4. 3 . I mean, thats in the even in line with the other indexes and indicative of the performance year to date. Shanghai stocks are done about 10. 5 even though we do have signs of an improving economy, so sunday we will get the official pmi number which is expected to come in at a seven month high. But investors dont seem to be looking at the data, dont listening to policymakers. And kelly, one final note. One bit of news from china today, they are getting the iphone 5, that will be on sale in the middle of december. So they havent got it yet, but they will. And lots of excited apple fans out there. Deidre wang morris, thanks very much. Maybe well see the same effect in china. Mario tdraghi is done speaking. Hes basically focused on two elements and thats competent i haveness and rebalancing. Calling for the need it for both in the eurozone and alluding to the difficulty the bloc has had when it comes to the internal devaluation and again some of the figures everyone this morning from germany. For more, lets introduce adrian schmidt. Adrian, 1. 30 for the euro on the back of the comments. Strong rally today. Will the run continue . I think it will be a struggle to get through 1. 3030, but the move up to 1. 30 is really more about general positive Risk Appetite on the back of optimism about the fiscal cliff. So that are probably be more of the driver. If we see more news suggesting that maybe something will be done by christmas, perhaps we can advance some more. The dollar still very Much Negative currency. What about the vote were expecting out of germany with regards to greece, how important is this one . Its important, but fairly clear that it will pass. I dont think anybody has any incentive to block it. I think much more of a problem for greece is whether theyll manage that bond buy back. Because its not in the banks interests at the moment. And theres a problem definitely in achieving the 30 billion required. It would certainly seem that it would help support the risk taking weve seen, but even though were seeing the greek banks react negatively to the news and people wondering what it means if some of the private sector holdouts from the last time around, Pension Funds and the banks, have to take more losses. There isnt a lot of incentives for the greek banks to participate. So its not clear how that will happen. Some of the bond holders could convinced to sell to greece if the price is right. The price thats being appeared to be set, although it doesnt look realistic, so it may be adjusted, but whats more realistic in your view . Clearly the market was up since the price they set on friday, so it doesnt make sense to do it there anymore. In terms of what i think is realistic, i mean, its not really about what the value of the bonds is. Its a question of where the market is at the time. And also where its marked in the greek banks books. Good point. Thats the clear problem that they dont want to 2012, we can almost look about a as the year of the teflon euro. If you asked where it would be at year end, they might say parity. Were at 1. 30 and it does seem pretty remarkable. Will that continue in 2013 . I think it probably is because the underlying story is mostly Foreign Exchange tends to be determined by yield spreads and yield spreads arent going to do very much because once you hit close it zero in most of the machblg countries, theres not a lot of scope to move. On an aggregate basis, of course, the euro situation in terms of current account position for instance is reasonably solid. Very much on an individual basis. So can you head off expectations. Once youve done that, theyre still significant in terms of growth in the region. Even though weve heard talk that the ecb might ease and that the u. S. For it part may be looking stronger . The ecb is pretty limited. The deposit rate theyre reluctant to go to negative. Market rates are already hovering there. So not a huge amount of difference to market rates. Even if the u. S. Growth numbers are stronger, they might be stronger only because theyre heading off the fiscal cliff. Theres still more fiscal tightening to do. Im just trying to get a reasonable trip to greece here. Youre con founding my hopes. But thanks very much for stopping by. And i had dree adrian reminding us that the 1. 30 level may be around to stay. Coming up a little later, what toys will kids be badgering parents for this christmas . Beccy and geoff visited the fair to find out. Having you ship my gifts couldnt be easier. Well, having a ton of locations doesnt hurt. And a santa to boot [ chuckles ] right, baby. Oh, sir. That is a customer. Oh. Sorry about that. [ male announcer ] break from the holiday stress. Fedex office. Welcome back. Japan has finally gotten a bit of a reprieve. Here are the details from korea. A raft of Economic Data out, some of it surprising toward the up side. Industrial output recovering to 1. 8 versus expectations of a fall of 2. 2 . Things are not looking so upbeat elsewhere. Jobless rate coming in at 4. 2 in line with expectations. Closely watched Consumer Price index also came in flat as expected. This follows five months of decline, further cementing views that the boj will roll out additional monetary easing. Of course price stabilization a key point of contention next month elections, both the Ruling Democratic Party of japan and its main rival the liberal Democratic Party investigating the need for the central bank it on did more. Japanese Household Spending fell 1 from a year earlier showing consumers have yet to loosen their Purse Strings worried about the Economic Outlook at home and abroad. But on the bright side, the drop was less than the 0. 9 an lis were looking for. There a lot of pressure now on the boj to beat deflation, but what does that mean for the asian population which is counting on their savings . Here is what one market watcher had to say. There is a big issue here and the strange thing about it is that it will probably be those older, conservative especially rural voters who are going to put ldp into power this this month for a long time especially if we do get inflation kicking in. Japanese savers and post office savers in particular are not going to be very happy at the prospect of earning what amounts to about 0 on their savings. And that could see big shifts in thinking among savers Going Forward. Thats the latest from japan. Back on you. Sticking with tokyo for the molt, moment, it has given the thumbs up for a 10. 8 billion stimulus plan. This approval comes as part of the governments push to support the economy ahead of the election. Its about double the size of the last stimulus package announced just last month. For more on this, joining us now is chief economist for emerging markets at bbba. Thank you for joining us. You can give a sense as to whether this stimulus package is expected to finally revive hopes for japans economy . Im afraid that weve seen too much of that, its been already like two decades seeing fiscal and monetary packages coming in on top of an economy that actually needed deleveraging. And theres lots of lessons we can learn for europe on japans experience. Theres really not much you can do. You need to go through that what japan needs is liberalization. Opening up to everything you can imagine which comes from a broad labor force to competition. Thats what japan really needs. So i am not very positive on this additional fiscal stimulus package. Is what kind of structural reform are you talking about . Because it does seem as though for an economy like japans, it is fiscal stimulus, it is monetary stimulus that has to come in and avoid a broader downturn. As i mentioned, i mean, fiscal and monetary stimulus are welcome when you are in the process of recovery. But i dont think japan is still there. Theres been interest kind of recovery after the earthquake, but that was like basic things and were seeing it dying out no matter what the data actually showed. I wouldnt read too much on the current data. What japan needs in terms of Structural Reforms is young labor force, new ideas, and open the market which is still large to foreign competition. We simply create new markets, new ideas from japan. It certainly doesnt help that its neighbor and big trade partner china has been weak lately. And on this note, just want to bring people this news. China is expected to post strong pmi data from november that could help cement the countrys recovery sorry. Markets expect mainland Manufacturing Activity to record its fastest pace of growth in seven months, but theyll have to wait until monday to react. Official data at 2 00 a. M. Central european time. We wont be covering that one live. But is there a sense in your view that china may be showing better Growth Prospects here . Yeah, i mean of course Fourth Quarter have to be better. All analysts around the globe were expecting lard Third Quarter which didnt happen, so we all delayed the recovery in china to the Fourth Quarter. And its coming, but on the backdrop of of course fiscal and monetary stimulus not as large as it used to be in the previous global recession. But its there. So its clearly coming. But i dont think the recovery will be as strong as what we saw in 2010, early 2011. Its going to be weak. So i think we should all get used to China Growing around 7. 75 even to 2013. Well leave it there. Thanks for your