##roen dijsselbloem, mario draghi and martin schulz, and which was presented at the end of june, appears to me to aim clearly for centralisation and risk - sharing. but the five presidents say nothing about the transfer of effective control rights, not to mention sovereignty rights – understandably so, one might add. after all, there is very little willingness among european governments to veritably relinquish sovereignty. and the national parliaments insist on retaining their most prestigious right, the right to make the budget. nobody likes having their affairs meddled with. that ’ s already a common response whenever the european commission requests corrections be made to national budget plans. last autumn, when there was the prospect of the european commission rejecting the french budget, the french finance minister michel sapin said : “ the commission (... ) has absolutely no power to reject or knock down or censure a budget. here as elsewhere, sovereignty belongs to the french parliament. ” nobody would really dispute that comprehensive reform can only be achieved one step at a time. but if we don ’ t want to stumble, the steps also have to be taken in the right order. i will give you two examples. the five presidents call for the prompt establishment of a joint deposit guarantee scheme. given that we now have a system of joint banking supervision in the euro area, it would be logical in a way, at least for the institutions supervised directly by the ecb, to belong to a single deposit guarantee scheme. however, the fortunes of banks do not hinge solely on supervision, but are still heavily influenced by national economic policy and national legislation, too. consider the national insolvency codes, for example. more forgiving rules on the insolvency of corporates or private individuals can impair the profitability of banks and shift burdens from the private or public sector into banks ’ balance sheets. if this drives banks into distress, depositors from other european countries would then effectively have to foot the bill. this is why i regard cross - border risk - sharing in respect of deposit protection as premature. i feel similarly about another form of risk - sharing that is proposed again and again, specifically the creation of a single unemployment insurance fund. as long as member states themselves control the main job creation levers – which is to say, they decide autonomously whether to implement labour market reforms, how high to set the minimum wage or even if they are investing

backfire ), but more market economy and competition. and the road to more competitive structures is only through a stable, i. e. tight, money. it is true that the great master of viennese popular theatre, johann nestroy, once philosophised : “ the phoenecians invented money - - but why so little of it? ” however, the central bank must limit the supply of money and set the interest rates accordingly. that is its task. it is also true that arthur schopenhauer once said : “ there are people who would pay any price for money. ” yet philosophers are not always right, especially when it comes to analysing the economy. the same applies to schopenhauer ’ s dictum ; otherwise, it would be virtually impossible, above all, to manage the money stock by using interest rates. vi the disintegration of monetary policy strategies in the 1970s did not only have the economic implication that countries had diverging degrees of economic success. there was an important european policy implication, too. the plan to implement a phased monetary union that we developed in the werner group in 1970 soon foundered ; not only on differing monetary strategies, but also on the lack of willingness of at least one country, at that time, to surrender national sovereignty. in its day, in fact, the werner plan had two advantages over today ’ s maastricht treaty : • firstly, the six - nation ec of the time was relatively homogeneous in economic terms. • secondly, with regard to its strategy for integration, the werner plan was more consistent than the maastricht treaty. it envisaged a marked intensification of both political and monetary integration. but, in the final analysis, at that time there was neither the willingness to realise this deeper political integration nor a convergence in monetary policy. the monetary union, which had already been planned for the 1980s, did not come into being. the lack of convergence in the 1970s was not even enough to keep a larger monetary arrangement together. in the end, all that was left was the ” mini - snake “. the exchange rate mechanism ( erm ) of the european monetary system, newly formed in 1979, was also not very stable to begin with. it was not until 1983 that an important change took place in the history of monetary integration in europe. with finance minister delors at the helm, france changed course towards a clearly non - inflationary policy. others