savers, beginning with those who have been hit hardest by the crisis. it nevertheless implies changes at both national and european levels. at national level, we need to prioritise public spending towards productivity - enhancing investment, ensure that labour and goods market are flexible, cultivate a supportive regulatory, judicial and educational environment, and open our economies to spur competition and encourage the emergence of new actors. opaqueness and vested interests17 are not only defining features of developing economies. successful reform in european economies hinges on efforts to curb rent - seeking behaviours. for example, doesn ’ t the single supervisory mechanism have the objective of freeing bank supervision from national politics? see european commission ( 2013 ). long term financing of the european economy, green paper, march. i refer here to the concept of “ limited access social orders ”, see north, d., j. wallis and b. weingast ( 2009 ). violence and social orders : a conceptual framework for interpreting recorded human history, cambridge university press. bis central bankers ’ speeches at european level, we need to provide a framework that supports and incentivises the introduction of such national policies. this is the role of economic union in the euro area, the “ e ” of emu. i would stress, however, that economic union does not mean defining a single economic model across all countries. on the contrary, its purpose is to create the conditions for each country to identify and develop its comparative advantage. paradoxically, it is only by encouraging difference – comparative advantage – that the euro area can achieve convergence – that is, a more even distribution of economic outcomes. avoiding re - nationalisation and protectionism let me finally address the third lesson learnt from east asia. europe needs to avoid protectionist temptations and calls for re - nationalisation. protectionism and beggar - thyneighbour policies would lead to further losses of welfare at both european and global level. fortunately, there has been no significant surge in barriers to global trade in recent years – unlike during the great depression – thanks to global and regional policy coordination. these efforts remain important. barriers to trade in goods and services cannot be raised within europe thanks to our single market and competition rules which are enshrined in european laws, but the single market can be further enhanced. savings have been partly re - nationalised as a consequence of financial fragmentation. this is a trend that, if left unchecked, can be fatal to the single market. completing the banking

green paper which focuses see article 105 ( 1 ) of the treaty. london economics ( 2002 ), “ quantification of the macro - economic impact of integration of eu financial markets ”, report to the european commission. see article 105 ( 1 ) of the treaty. see under http : / / www. ecb. int / pub / pdf / other / target2progressreport200510en. pdf ( second progress report on target2, ecb press release dated 21 october 2005 ). see http : / / www. ecb. int / pub / pdf / other / ecgreenpaperfinancialservicespolicy2005en. pdf 2 / 6 on the consolidation and consistent implementation of the legislative framework for financial services to be achieved by exploiting the potential of the existing institutional set - up and by a profound assessment – both ex ante and ex post – of new legislative initiatives. the eurosystem also supports the strands of action suggested by the commission in the area of financial regulation and supervision, in particular the importance attached to the objective of rationalising the existing regulatory framework and the pursuit of supervisory convergence. third, we try to enhance knowledge and raise awareness of the state of and need for european financial integration, and we measure the progress made towards its achievement. and fourth, we can act as a catalyst for private - sector activities by facilitating collective action and assisting with possible coordination problems. i would like to concentrate more particularly on these last two kinds of activity, namely measuring the state of financial integration and acting as a catalyst for private - sector activities. 4. the integration of european financial markets and selected examples of fostering it the basic starting point for any possible action is to first assess the state of affairs in order to gather the evidence upon which the decision to undertake a certain activity can be based. for a financial instrument or financial service, a price normally exists, so one can use quantitative indicators, based on the law of one price, to measure the degree of integration. in this respect, let me draw your attention to the ecb ’ s report on “ indicators of financial integration in the euro area ” that was published at the end of last month. 8 this report provides an assessment of the degree of financial integration in the main segments of the euro area financial market, covering the money market, the government and corporate bond markets, the equity market and banking markets. i should also like to point out that while this first