makers, to be able to get their act together whenever something bad happens to the eurozone. and yes, the risk today is not that much political risk in individual countries. it ’ s a risk that the ministers, eurogroup, will not find the strength to unite, to put their heads together and act as one, if anything bad happens to the eurozone. so that ’ s a concern. the only answer is to -, step by step to make the eurozone stronger, and to create this sense of commonality, a sense of the need for common action. we are very divided, the eurozone is very divided at this moment, and there ’ s obviously elections this year. do you worry about a lost year? i wouldn ’ t say the eurozone is divided. it ’ s just a risk of being too inward looking. do you worry about a lost year, in terms of policy? it ’ s not a lost year, i mean, there are reforms in countries, reforms are continuing in different countries, but certainly there is a need to take a step to make the eurozone significantly stronger. at some point there will be a need for a quantum leap into making the eurozone more united, stronger, but that ’ s not going to happen this year. or next year, or the year after, because no one wants that anymore. the voters don ’ t want that anymore. well, the burden of proof is on us. it ’ s on european institutions. the burden of proof cannot be on voters, that ’ s not how democracies work. let ’ s talk about brexit. the president of the eurogroup said yesterday that the uk ’ s looking at massive unemployment, and that it will go back to the 1970s. i am not going to comment on the economic consequences of brexit. what we are really focused on, and we are very close to the bank of england, we are exchanging views, sharing notes with the bank of england. they know what will be the consequences, so i will entirely defer to mark carney to pass that kind of judgment, and i fully trust him. what we start considering is the structural consequences of brexit. how is that going to impact the landscape for financial services? the infrastructures that we need in the eurozone to create growth, etc. it ’ s probably too early to tell, but it ’ s shaping up, i would say, so we have to start

offset by rules of conduct and disciplinary procedures aimed at preventing crises. it was expected – perhaps naively – that the rules would be respected. but then, what was the alternative? to wait, as some had suggested, until the necessary conditions were created for a more complete fiscal and political integration before proceeding to monetary integration? that would risk delaying monetary integration and seeing a repetition of the turbulence, and perhaps led to an implosion of the system and of the single market. it was then decided to make a start to monetary union without taking into account the possibility of serious financial or budgetary crises of the member states. this type of behaviour is not surprising. it characterises innovation in general, even in the institutional field. the first cars did not have advanced safety systems such as reinforced bumpers or air bags to protect drivers. neither could they have been developed and patented before the first car appeared on the road. people had trust in the prudence of drivers, in the slow speed of the first cars and presumably believed that the limited number of cars on the road would keep accidents to a minimum. after realising that the accident rate was far higher than expected, the car makers decided to develop better systems of protection and the public authorities decided to regulate the issuing of driving licences. the experience of the first ten years of euro has shown that even with strict rules of conduct and coordination mechanisms the members of a monetary union may find themselves in a financial and budgetary crisis. the reasons vary. one is the circumvention of the rules, as in the case of greece, which managed to double its public deficit for many months without notification. a second reason is the accumulation of financial imbalances in the private sector, which in the event of a crisis can become public debt. under these conditions a country may lose access to the financial markets. what is described in the literature as a “ sudden stop ” in the influx of capital occurs. this phenomenon is typical of developing countries, which borrow in foreign currency to facilitate the inflow of capital. in advanced countries this type of problem is rare because the debt is generally denominated in the national currency, and if need be the central bank moves in and funds the treasury, replacing private operators. the credit risk of the sovereign issuer is avoided, and transformed into a risk of monetisation of public debt and therefore of inflation. the euro area is in a particular position even for the constraints that are applied every time a step towards further