: you can ’ t really argue with them. investors ’ confidence needs to be regained and maintained. this requires, amongst other things, an appropriate fiscal policy course. thanks to agreed debt relief measures, liquidity needs will be rather limited over the coming years. further protection is provided by the cash buffer. the route to future prosperity for greece could lie in proving in the years ahead that it can stick to a sound fiscal path and bring its debt ratio onto a sustained downward trajectory. in such a scenario, markets would become increasingly confident about greece, and the growing impact of market financing would be bearable. this solid path may sound daunting. however, greece is currently running a marked structural budget surplus, which means that no further fiscal contraction would be necessary. 3 the future of the euro area ladies and gentlemen allow me to come back to the aforementioned ancient agora : what was it that made it so economically successful as a marketplace for exchanging goods? obviously, it confined sellers and buyers to a distinct space. this spatial concentration made it easy for merchants to find customers, while the latter could easily compare prices. thus, the agora reduced transaction costs. however, such a market also creates a fundamental problem. given the information asymmetry between buyer and seller, the latter has an incentive to cheat by providing goods of lower quality or in smaller quantity than agreed. of course, the buyers will eventually notice the deceit and stay away from such a market. the ancient greeks found a clever solution to this problem : they established public institutions to improve and maintain market efficiency. 5 the city - state provided standardised weights and measures that merchants were obliged to use. for instance, the agora featured a stone table, the " sekoma " ; it had several cavities which were used to measure different volumes. special magistrates, the " agoranomoi ", examined the quality of products and watched over the proper conduct of transactions. these market controllers made sure sellers and buyers were held accountable for their actions. they could impose fines – and carried a whip as a token of their authority. in addition, the city - states minted coins by putting a stamp on silver discs. in athens, these coins bore the owls which have become synonymous with the city. instead of weighing and arguing over the precious metal content, market participants could simply count these coins. the city - states guaranteed the quantity of silver and made the coins legal tender in the agora. of course, the provision of

##holder to take on more risks. this is the essence of moral hazard. and again, the ancient greeks provide us with an illustrative example since they may have been the first to come up with a commercial insurance scheme. back then, unpredictable weather conditions and piracy rendered maritime trade a highly dangerous venture. but the ingenious greeks invented rather complex contracts for a loan which could be used for equipping or repairing a ship and which would not have to be repaid if the ship was lost on its journey. if the ship made a successful return, the creditor received its principal plus massive interest on top, reflecting the risks involved and the insurance premium. however, if the loan exceeded the value of the ship, there was an incentive for the ship - owner to simply keep the loan and make off with it. thanks to a speech ascribed to the athenian orator demosthenes, we know of a certain hegestratos. 6 he is said to have planned to sink his own ship during the journey – with all passengers and cargo on board. unfortunately for him, he was caught in the act, jumped overboard and was not seen again. nevertheless, the incident, which may have been the first case of insurance scam in history, led to a complicated legal dispute between an alleged coconspirator and a creditor. fast - forward more than 2, 300 years, the maastricht framework was based on a clear understanding of the liability principle. member states would remain autonomous in terms of their economic and fiscal policies. the flip - side then was the " no bail - out " clause. both actions and liability were located at the national level and, thus, aligned. today, many europeans call for greater risk sharing. if such a joint liability were established, corresponding sovereignty rights would need to be transferred to the european level, too. otherwise, the set - up could contribute to a possible resurgence of unsound developments. however, my impression is that the willingness to cede sovereignty rights to brussels is rather limited in most of the euro area member states. for the time being, therefore, reforms must fit within the existing maastricht framework. but that does not wholly rule out elements of joint liability. i concede, for example, that a common deposit insurance could contribute to a more stable financial system, as it would reduce the risk of bank runs. however, the balance between actions and liability requires that risks that arose under national responsibility cannot be mutual