Nobody seriously disputes that a collective strategy involving more structural reforms in some countries including France, and more public investment in others including Germany would make for a better policy mix for sustainable growth and employment in Europe. Second, the Finance Minister would be responsible for supervising the implementation of the collective strategy, using adequate instruments to provide symmetric incentives. Negative incentives would include the existing sanction mechanisms, and could be broadened in contractual procedures, already put forward in the 2013 Franco-German contribution on EMU, or in Chancellor Merkel’s 4 “binding reform contracts” proposal. A positive incentive could be for instance the access to a euro area ”Convergence Fund”, through which Member States could benefit from common funding. Third, the Finance Minister would be responsible for implementing centralized crisis management. A Finance Minister for the euro area would naturally be in charge of overseeing European Stability Mechanism operations. Last, while moving towards further integration, the Minister could be given the authority for managing a euro area Convergence Fund, progressively evolving towards a euro budget. Further integration and democratic accountability should move forward in parallel. These institutional changes obviously require a new Treaty. 3  Marcel Fratzscher, Lessons for Europe from German Monetary Union, DIW Economic Bulletin 27.2015  4  Angela Merkel’s first parliamentary speech of the third term, December 18 2013. 6  BIS central bankers’ speeches  A legitimate institution with genuine admin.

The cyclical weakness of aggregate demand restricts Albania’s economic growth in the short and medium term, whereas the solution of structural problems will determine its long-term development. Overcoming these challenges requires joint, brave, coordinated and forward-looking action. The Bank of Albania deems that this action should be based on four pillars: (i) safeguarding macrofinancial stability in the country and pursuing stimulating economic policies; (ii) reducing uncertainty in economy; (iii) ongoing structural reform and (iv) convergence with the European Union. 1. First pillar: Macroeconomic stability and economic stimulus  As already known, Albania’s economic development is in a fragile stage. Against the backdrop of the global crisis, the economic growth rates have decelerated, posing difficulties to the public and private sectors, to businesses, households and the financial system. In plain terms, the aggregate demand is weak and does not manage to fully utilise the country’s productive capacity. Consumer spending is low, primarily due to households’ uncertainties about the future, but also due to their slowing income. The two other aggregate demand components also show limited ability in providing stable economic growth impulses: public spending is limited, due to lack of fiscal room because of a higher public debt, while Albania’s exports suffer the sluggish demand from the international markets and the low degree of diversification. Finally, business investments are downward, reflecting businesses’ restricted room for boosting their sales and banks’ tighter lending standards. BIS central bankers’ speeches  1  The economy is a complex and interdependent mechanism.