just the two regulations on financial sanctions for euro area countries. second, the enforcement tools also need to be more effective. for example, the new macroeconomic surveillance framework needs to provide clear incentives by envisaging financial sanctions already after the first instance of non - compliance. discretion to reduce or suspend financial sanctions – either on grounds of exceptional economic circumstances or in response to a reasoned request by a member state – strongly reduces the effectiveness and sets the wrong incentives. this should not be permitted : it will help nobody. third, the policy requirements should be more ambitious to match the current reality of the euro area. the new macroeconomic surveillance framework, as amended by the council, does not yet provide a clear focus on the euro area countries with large current account deficits, significant losses of competitiveness and high levels of public and private debt, as well as any other vulnerabilities challenging our economic and monetary union. as regards fiscal surveillance, ambitious benchmarks are needed when establishing an excessive deficit. the scope for considering “ any relevant factors ” in case of an excessive deficit should be clearly reduced. the adjustment path towards a country ’ s medium - term budgetary objective also needs more ambition. in this context, the annual improvement in the structural balance should be significantly higher than 0. 5 % of gdp when a country ’ s government debt exceeds the reference value of 60 % of gdp, otherwise there are fiscal sustainability risks. fourth and finally, it is also crucial to guarantee the quality and independence of fiscal and economic analysis. we propose the establishment of an eu advisory body of recognised competence. it goes without saying that remaining weaknesses in the collection and reporting of data have to be addressed immediately and rigorously. these are my main areas of recommendation. it is clear that implementation of the new governance framework will have a significant impact on national policies, which will call for enhanced democratic legitimacy. a key issue will be to anchor the forthcoming reforms firmly at national level by means of strong budgetary frameworks. for euro area countries, independent national fiscal policy institutions should be mandatory. clear borrowing frameworks should also be considered. i welcome the euro area countries ’ commitment of 11 march to transpose the eu fiscal rules into national legislation and including for sub - national levels. the ecb and, i believe, also the citizens of europe count on the european parliament to drive these changes forward. we are mandated as european institutions to take a broader perspective. we are independent of specific national circumstances. and we are here to think

##erabilities are excessive and avoiding protectionism. having spent decades investing in regionalisation, the eu is well placed to succeed in a world where the global order is more fragmented, while still acting as a force for trade openness. three advantages stand out. first, europe has the world ’ s largest single market, which gives member states a strong base in which to establish new supply chains if strategic imperatives require it. in fact, over 70 % of the euro area ’ s participation in global value chains was already regional in 2019. second, we have long pursued a form of “ managed globalisation ” within our single market. although barriers to commerce and exchange have been steeply reduced, we have set up strong common institutions to police the market and ensure that countries have recourse to binding arbitration in the event of disputes. this is likely to make openness more sustainable within europe at a time when it could be under threat at the global level. third, we have already made considerable headway towards pooling resources, which will be important in managing the ongoing transitions. the investment needs we face are massive, especially if we are to decouple quickly from russia. but we have already set up innovative european instruments that can help, including the €750 billion next generation eu fund established in response to the pandemic. almost 40 % of that spending has been allocated to the green transition. at the same time, europe has the potential to implement a positive - sum form of regionalisation that also makes the global economy more robust. the single market allows the eu to use its economic weight to steer openness in a rules - based direction, and to set values and standards in other parts of the world – which it already does via the so - called brussels effect. [ 28 ] and because regions become more dynamic internally when they integrate further, we could see europe emerging as another economic engine on which the global economy can rely to sustain growth. recent decisions will help in this regard. next generation eu investment, for example, could increase real gdp in the eu by 1. 5 % by 2024. [ 29 ] moreover, were eu leaders to raise military expenditure to 2 % of gdp in response to the russian threat, this would imply an increase in government spending of 0. 7 % of gdp. that could add another 0. 2 percentage points to euro area growth by 2024. but if europe is to seize this moment, we cannot afford to stand still. new challenges may require