, let me point out that the structure of the five presidents ’ report varies slightly from that of the preceding four presidents ’ report, published during the height of the crisis in 2012 by the same institutions except for the european parliament. in that report, the four pillars of genuine emu were listed in the following order : a banking union followed by a fiscal, an economic and a political union. there may be political economy considerations behind the fact that the five presidents prioritize economic union, as buoyant economic activity facilitates the implementation of ambitious reforms. apparently, the renewed dip in economic activity observable since 2013 has hampered european citizens ’ appetite for further deepening of emu and indeed strengthened disintegrative forces across the eu. moreover, the progress made in recent years in the fields of banking and fiscal union may justify their “ downgrading ” in the current report. bis central bankers ’ speeches the workshop builds on our conviction that such a comprehensive framework deserves academic scrutiny from various disciplines and a broad public debate. without anticipating the outcome of this workshop, let me just make some personal comments on the issues at stake. i would like to start with some reflection on monetary union – a fifth pillar the five presidents implicitly seem to take for granted. in the run - up to the crisis, the question was raised whether a one - size monetary policy can fit all, as some countries were enjoying an economic boom while others were still struggling against economic contraction. this uniformity of monetary policy should not be overstated at the current juncture ; however, as almost all euro area economies still have a negative output gap. but sooner or later, some countries will be forced to adopt fiscal, macroprudential or structural policies that counteract a monetary policy stance that might be inappropriate for them in particular, while the ecb can and must only target the euro area aggregate with its monetary policy. currently, eurosystem monetary policy helps improve the otherwise lackluster outlook for economic growth and price stability in the euro area. low or even negative interest rates favor spending over saving. asset purchases ( or quantitative easing ) help fix the monetary transmission mechanism. the provision of long - term liquidity to the banking sector supports lending to the private sector. forward guidance affects long - run interest rate and inflation expectations. let us not forget that the ecb ’ s readiness to do “ whatever it takes to preserve the euro, ” as announced in mid - 2012, was undoubtedly the decisive element in rees

##tablishing confidence in sovereign bond markets – a precondition for recovery. additionally, the ecb is the key player in the single supervisory mechanism ( ssm ), a core element of banking union. moreover, it is one of the institutions involved in the assistance programs for member states under financial stress. all this made some commentators fear that the ecb, as “ the only game in town, ” might be stretching beyond its mandate. more importantly, however, it underlines the need for other or new institutions to step in and relieve the ecb from some of its responsibility. actually, this is the central message of the five presidents ’ report. the rationale behind a genuine emu as a complement to the ecb ’ s monetary policy comes from the optimal currency area ( oca ) theory, which states that within a monetary union, the lost mechanism of exchange rate adjustments must be replaced by that of labor and capital adjustment if countries are affected by asymmetric shocks. hence the justification of structural reforms in labor and product markets. they should increase the flexibility of wages and prices while taking into account the autonomy and responsibility of social partners. another element to improve the resilience of emu would be stronger business cycle synchronization through economic and financial integration ; but here the evidence is sobering. yet, while the oca theory concentrates on asymmetric external shocks, what seems to matter more are really asymmetric trends. that is to say, that since the introduction of the euro, member states have systematically built up external imbalances as a result of unsustainable debt accumulation and asset bubbles. here comes in another element of the oca theory : the role of risk - sharing mechanisms. given the lack of fiscal risk - sharing, however, this role has been more or less explicitly delegated to financial markets. unfortunately, however, financial market participants insufficiently understood the risks they were taking. the rest of the story is well known : a dramatic stop of private financing flows required economies under stress to quickly adjust their external imbalances via improved competitiveness at the cost of internal disequilibria, notably high unemployment. the negative spillovers have been felt all over the euro area during the double dip recession, albeit at different degrees. what can we learn from this crisis? apart from market - based risk - sharing mechanisms, emu needs a fiscal framework that combines risk reduction and risk - sharing, in other words : discipline and solidarity