what extent? the first step for a unified european strategy is acknowledging its need. in the face of nonnegligible risks to financial stability and financial integration, as well as the referred heterogeneity across banks and economies, a debate should be launched on the possible mismatch between the repercussions of high npl levels and the current strictness of the eu legal and regulatory framework. in particular, the brrd was designed for a steady - state, which is still far from the current situation in financial markets, and state aid rules, while placing financial stability at the core, seem to provide little flexibility to address the systemic nature of the problem. to reduce npls in a significant and swift way, these constraints must be addressed – but only a european approach can do so while ensuring the necessary level playing field, an essential precondition for the coordinated action that should follow. this discussion – ideally complemented by enhanced flexibility – would provide decisive clarity on the rules of the game and likely pave the way for bolder solutions at national level, especially in 1 / 2 bis central bankers'speeches countries where the npl challenge is more pressing. it could also be the starting point for considering and conceiving a more ambitious strategy to effectively reduce npl stocks across europe. a strategy with the necessary firepower to enhance national efforts and complement ongoing initiatives in the ssm and other european fora. some promising european approaches have been recently put forward and deserve to be further explored. 2 / 2 bis central bankers'speeches

these mechanisms must be robust, with sufficient financial resources and designed to respond quickly and effectively, while at the same time promoting accountability and avoiding moral hazard. the more robust and credible these " backstops " are, the less likely they are to be used for real. to address this concern, the first temporary european mechanisms were established in may 2010 : the european financial stability facility ( efsf ) and the european financial stabilisation mechanism ( efsm ). replacing these was the european stability mechanism ( esm ), created in 2012, now a permanent facility. this mechanism is an indispensable complement to the reforms mentioned above and an important milestone in the profound transformation under way in the euro area. as robert schumann stated in 1950 : “ europe will not be made all at once, or according to a single plan. it will be built through concrete achievements which first create a de facto solidarity. ” final observations i would like to conclude, answering the question put to this panel ( “ what is the future of the euro? ” ) on a confident note. i am convinced that the euro area will not only survive this crisis but also will emerge stronger and more united than before. europe has faced difficult crises in the past, while not of this magnitude, which were ultimately overcome and led to the bolstering of european integration. i believe that this time will be no different. the european project is still a work in progress and, as we have seen, has flaws in its foundations. we cannot miss this unique opportunity to strengthen these foundations, through profound reform that is key to increasing stability and resilience in the euro area, completing the single market and strengthening the european union ’ s international role. coherent economic policy, sound, effective and accountable institutions and greater solidarity are crucial for europe to overcome the crisis and restore sustainable growth and employment. we should ensure that the european union is a “ positive sum game ”, in which everyone benefits and where the distribution of gains between countries is balanced. as an integral part of the whole that is the european union, the euro will prevail as the common currency for a group of countries that share a single monetary policy ; that will establish banking union ; and that will operate within a coherent and binding framework of rules and under institutions that ensure compliance with those rules. the future of the euro area will involve greater sharing of sovereignty, with increased legitimacy, accountability and solidarity, in which european institutions are increasingly answerable for the “ whole ” and