union, the crisis has exposed fundamental weaknesses of the european economy, revealing growing internal imbalances. the functioning of the european monetary union has been under particular stress as the existing surveillance procedures proved to be not comprehensive enough. one point that has been neglected was the relevance of current account deficits. i believe that within the eu, the external deficits of member states are relevant as they reveal discrepancies related to competitiveness, and therefore inconsistent and weak coherence of the economic policies. the accumulation of imbalances has triggered a slow pace of recovery in europe. the crisis took its toll on productivity, and prices and competitiveness remain key issues. also, the functioning of the european monetary union caused headaches because of insufficient comprehensive preventive and supervisory procedures. moreover, sovereign debt crisis has brought in the limelight not the crisis of the euro per se but of the institutions that governs the eurozone. in this context, i will repeat what douglas north said : institutions play a pivotal role in governance. and also recall the words of ecb chief economist, mr otmar issing. when he departed the institution, in front of 400 strong audience mr. issing reminding us that “ euro is an unfinished project ”, stressing that it relied on the monetary pillar, while enhanced fiscal policies and economic cooperation were still needed. therefore, as the recent developments also show, a more effective economic governance in the eu and the euro area is within reach through fiscal discipline, broader economic oversight, closer coordination, a more robust framework for crisis management, stronger institutions and a decision - making based on clear and strict rules. in the particular case of the interdependent economies across the eu, enhanced governance will boost economic growth and job creation. at the same time, developing a culture of values and professional conduct and ethics can make a very important contribution to the smooth functioning of markets and this is a prerogative of the corporate sector, the private sector in general. i ’ m confident europe will find the right way to move forward, given the common cultural values, with measures and policies that should avoid both asymmetric and side effects. we all know how harmful sudden and large capital swings are. europe ’ s governance raises also the issue at a more global level. in fact, international affairs and corporate governance are an integral part of this picture. high - profile international financial institutions such as the imf are concerned and involved particularly in economic governance issues, as they provide assistance in

is of paramount importance. however, there is still no consensus on operationalizing the edis, on debt mutualization, on setting the minimum requirement for own funds and eligible liabilities, on the features of the fiscal union, and the list could go on. i think that the union should also clarify the fine balance between the consolidated microprudential supervision of banks and national accountability in terms of resolution. the home - host issue has not been dealt with yet. moreover, the european financial architecture is populated with unfinished, incomplete, or untested mechanisms created after the crisis. even so, my message on the reform of the european financial sector is twofold. first, the reform is fundamental for the success of the european project. romania welcomes all the european commission ’ s initiatives aimed at enhancing supervision, consolidation, and accountability in this area, and we will do our best to help reach a consensus on these proposals during our incoming eu presidency. second, it is also fundamental for the integrity of the european project that euro - area should not be ring - fenced ; the reform should still make it possible for non - euro countries to join euro, when they will be ready, on a level playfield. price stability and financial stability are two sides of the same coin. you can ’ t have one without the other – this is a lesson that history has recently taught us. and none of them is possible without credible public policies. 1. lipton, david ( 2018 ), “ trust and the future of multilateralism ”, introductory remarks for the eurofi high level seminar, sofia, bulgaria, april 30, 2018. 2. powell, jerome h. ( 2017 ), " prospects for emerging market economies in a normalizing global economy, " speech delivered at the 2017 annual membership meeting of the institute of international finance, washington, october 12. 3. weidmann, jens ( 2017 ), “ monetary policy and the architecture of the euro area ”, speech at the deutsche bundesbank's capital city reception, berlin, 29 may 2017 4 / 5 bis central bankers'speeches 4. voinea, l. ( 2018 ), “ explaining the post - crisis philips curve : wage gap matters for inflation ”, manuscript 5 / 5 bis central bankers'speeches