tasks where the eu only has a coordination role, and where the european parliament is not yet a counterpart in terms of accountability. so we need to strike a balance. on the one hand, accountability should be assigned to national parliaments for decisions that are fully in the hands of national authorities. on the other hand, the esm needs to be equipped with swift and credible decision - making procedures. this will never be fully possible in an intergovernmental setting that is hampered by national vetoes and operates outside the constitutional safeguards of the acquis. against this backdrop, the esm should be turned into a body that is governed by eu law and is accountable to the european parliament. this would ensure that the esm is better placed to act in the sole interest of the euro area and thus in line with its functional mandate of ensuring the stability of economic and monetary union as a whole. a similar logic must be applied in any further discussions regarding a euro area fiscal capacity, the possible centralisation of eu investment schemes or the powers that a european finance 5 / 6 bis central bankers'speeches minister might have. fiscal instruments need to be complemented by institutional arrangements and democratic control at the corresponding level. if a euro area budget is established, it should be part of an ongoing debate on a euro area finance ministry and a euro area composition of the european parliament, as well as its role on both the revenue and expenditure side. while the creation of new umbrella funds, such as the investeu programme, may pursue laudable public policy objectives, we should avoid undermining established union methods. indeed, we should not succumb to the appeal of relying on secondary legislation in areas where primary law is unambiguous. concluding remarks as we take further steps to complete emu, we should keep in mind two principles that are at the heart of effective policy in a democratic society : namely, the effective alignment of liability and control, and the discharge of democratic control or accountability at the level at which policy decisions are taken. upholding these two principles is a necessary condition in the continuing efforts to foster economic convergence and further integration in the euro area. given the experience of the past 20 years, there can be no doubt that the progress achieved so far has laid the groundwork for further steps to be taken for a “ currency beyond a state ” – a fact that the early intellectual architects of monetary union were already aware of. in other words, to quote the then commission president jacques delors

area? “, ecb working paper no. 63, and greiber, c. and neumann, m. j. m. ( 2004 ) „ inflation and core money growth in the euro area “, deutsche bundesbank, discussion paper no. 36. 2 / 4 one dimension of data uncertainty refers to the problem of measuring well - defined economic aggregates. this problem occurs for example if variables cannot be measured precisely and are therefore subject to revisions after they have been published for the first time. the problem of measurement errors in real - time is most severe in case of “ real economy variables ”, where revisions can be very large. the gross domestic product is an important example. due to these real - time measurement problems we are left with a huge amount of uncertainty. and this is not only true for the current state of the economy, but also for our expectations of future developments. forecasts are conditional on real - time data, which may be revised at some later stage. against this background it is crucial to emphasize that monetary and financial data are far less affected by such measurement problems than data from the real economy. monetary data are available very quickly. and they are available with a much smaller measurement error than other key variables. therefore, money may serve as an important indicator of current economic activity. on a microeconomic level, private agents´ real money holdings depend amongst other determinants on their individual real income which is known to them. 7 if agents are able to quickly adapt their money holdings, changes in their real income will quickly translate into changes in their money holding. as a consequence, changes in aggregate real income quickly lead to changes in aggregate money. money, therefore, adequately aggregates the individual information on real income development up to the macroeconomic level. measurement problems become even more severe if certain model variables are unobservable as such. important examples include the output gap and the natural rate of interest. with such variables one is faced with another severe problem : the theoretical construct has to be translated into a statistical concept. and that is exactly the point where the problems of data and model uncertainty are closely connected : an empirical quantification of the output gap, for instance, is often based on more or less detailed assumptions about an underlying model structure. if in turn a policy reaction function depends crucially on such unobservable variables, errors in assessing the size of those variables may lead to large deviations from optimal policy. as empirical studies show, this applies