outside its jurisdiction. this takes the form of penalties for societies outside the united states and the prevention of access to the us payment system and is based on the central role played by the us financial system and the us dollar in global trade. several european governments believe that this situation could be mitigated by increasing the international role of the euro. but if markets are to entertain the possibility of an enhanced role for the euro, we need to consider what the conditions are that underpin the dollar ’ s dominance. the list is long, but the fact that the dollar is an expression of an integrated capital market is certainly one of those conditions. [ 34 ] for the eu to meet that condition – which, at this stage of its development, is more achievable than others – would require a complex programme of legislative and institutional harmonisation, which however could be put in place in short order. 6 / 10 bis central bankers'speeches the second reason why an institutional approach can help produce better outcomes is that institutions and their actions can be subject to more clearly defined democratic control. precisely because those institutions are invested with a mandate and defined powers, it is possible to make a more direct link between decisions and responsibility. the eu already has many channels through which its citizens can exercise democratic control, via national authorities in the eu council and members of the european parliament, who hold eu institutions accountable on behalf of the people who elected them. in fact, for the first time on record, a majority of europeans now feel that their voice counts in the eu. it is to be hoped that accountability arrangements to hold eu institutions in check continue to be strengthened, because the perception of the legitimacy of their actions depends on it. the role of the european parliament is vital here. of the institutions with a democratic mandate to exercise control, it is the only one with a european perspective. the european court of justice provides a second avenue of democratic control. its role in ensuring that eu institutions are following their mandates becomes all the more important in the absence of a european government. adherence to the judgments of the ecj is a necessary condition of the rule of law. consistency and uniformity in the interpretation of eu law across 28 member states are the bedrocks of eu law as an effective and autonomous legal order. [ 36 ] a basic function of the law is to stabilise expectations by providing a reliable foundation upon which citizens and companies can organise their activity and plan for the future. [ 37 ] and such predictability and certainty

erkki liikanen : economics and economic policy speech by mr erkki liikanen, governor of the bank of finland, helsinki, 10 april 2018. * * * the central bank is an organisation of public servants. public service bodies obtain their essential mandate from elected bodies. within the eurosystem, the central banks and their governing bodies have been given a definite mandate, including independence in monetary policy issues. in recent years, central banks have also been assigned new responsibilities in the field of macroprudential policy. as part of the eurosystem, the bank of finland participates in monetary policy decision - making and implementation. the bank also has a role to play as part of the banking union. how then should the central bank participate in domestic discourse on economics and economic policy formation? the bank of finland ’ s statements relating to domestic economic policy are based on objectives set for the bank and the eurosystem. according to the act on the bank of finland and the eu treaties the primary objective is price stability. without prejudice to this objective, the bank also supports the achievement of other eu economic policy objectives, such as balanced economic growth. the bank of finland participates in economic discourse in finland primarily at those stages of preparation and decision - making that are consistent with the bank ’ s expertise derived from research, international experience, or other publicly justified economic analysis. there are two such stages : first, identification of the problems related to the current state of the economy ; second, assessment of the potential effects of the alternatives for action. at the same time, we should bear in mind that decisions on individual items of public spending or revenue often involve such value judgements as a central bank should refrain from making. in the past decade, there was a lively debate in the united states on whether federal reserve chairman alan greenspan went too far in supporting president george w. bush ’ s tax reforms. at the central bank symposium in jackson hole in wyoming in 2005, professors alan blinder and ricardo reis emphasised that it is highly questionable whether central banks should voice opinions on issues of economic policy outside of the realm of monetary policy. the general opinion of the meeting was that central banks should refrain from making value - based statements, in particular. but it is an entirely different matter if economic policy jeopardises the conditions for price stability or causes disruption on the financial markets. example from recent years : the structural problems of the finnish economy a role that comes naturally to the central bank in domestic economic discourse