benoit cœure : towards a political convergence process in the euro area speech by mr benoit cœure, member of the executive board of the european central bank, at the interparliamentary conference “ towards a progressive europe ”, berlin, 16 october 2015. * * * summary the effectiveness of the ecb ’ s action rests on the “ m ” in the emu being kept free from political interference. but for this to be secured in a lasting way, we need to further develop the “ e ”, i. e. the economic union. in the past decade, intermediate solutions to save the euro area were found, but left the emu still vulnerable to future crises. therefore, we need to define a new convergence process, involving converging economic structures and more integrated markets. this should be complemented by fully legitimate institutions with the right instruments to intervene if the consensus is not respected. this new convergence process will lead to higher resilience against economic shocks on a national level and european level, via internal and euro - wide adjustment mechanisms. and it is a prerequisite before discussing a layer of fiscal stabilisation at the european level, which would protect monetary policy from bearing too much of the stabilisation burden. but such a new convergence process cannot be a technical exercise. for convergence to be lasting and to secure the buy - in of citizens and member states, such a process needs to be political in nature. this requires a revived political narrative for euro area integration, and a coherent european social contract that brings out the best in each national social contract. * * * honourable members of parliament, ladies and gentlemen, dear group vice - president carsten [ schneider ], many thanks for your kind introduction and for having me here today. i am glad to see that parliaments are at the forefront of the debate on the future of economic and monetary union or emu. you may wonder what an unelected central banker has to say about the political foundations of emu. after all, the european central bank ( ecb ) is not a political institution. indeed, for our work to be effective, the “ m ” in emu must be kept free from political interference. but to secure this in the long term, we need to develop the “ e ”, so economic union, further. i will argue today that the political dimension of economic union will be crucial. moving forward with passion and perspective almost, one hundred years ago max weber famously described politics

agency had had such tools on september 16, they could have been used to put aig into conservatorship or receivership, unwind it slowly, protect policyholders, and impose haircuts on creditors and counterparties as appropriate. that outcome would have been far preferable to the situation we find ourselves in now. second, the aig situation highlights the need for strong, effective consolidated supervision of all systemically important financial firms. aig built up its concentrated exposure to the subprime mortgage market largely out of the sight of its functional regulators. more - effective supervision might have identified and blocked the extraordinarily reckless risk - taking at aig - fp. these two changes could measurably reduce the likelihood of future episodes of systemic risk like the one we faced at aig.