these matters, both national parliaments and the european parliament already bear an important responsibility. national parliaments adopt the national government budget and structural reforms. at the same time, the european parliament, as co - legislator, has a key role in the design of an effective and efficient eu governance framework. it needs to consider the cross - border spillovers from national policies, as well as the impact of european policies at national level. the european parliamentary week can play a very useful role here as it allows us to learn from each other ’ s experiences. in fact, there has been no lack of successful reforms in different policy fields across eu countries. let me take a concrete example. in the area of financial services, the completion of the banking union is essential for improving the functioning of emu. looking back at what we have achieved since the crisis, the result is quite impressive. european banking supervision, which marked its fifth anniversary last year, has brought a more uniform approach to how banks are supervised. we have also created a new eu resolution framework, which ensures that banks can fail in an orderly manner and that the cost of bank failures is shifted away from governments and onto the financial sector. thanks to these achievements, the banking union is helping to make european banks safer and sounder and more able to support the european economy. we have made good progress, but we are not done yet. 2 / 3 bis central bankers'speeches on the one hand, we need to complete the banking union by operationalising the common backstop to the single resolution fund and advancing political discussions on banking union ’ s missing third pillar : a european deposit insurance scheme. to complete the banking union reform agenda substantial risk reduction has already been achieved and the process is ongoing and should continue. but further progress also depends on having a more harmonised regulatory framework. this entails, among other things, undertaking a serious effort to harmonise options and national discretions ( onds ), some of which lie in the hands of national legislators, limiting opportunities for regulatory arbitrage, and ensuring a level playing field at european level. this can only be achieved through european legislation and common institutions, which bring national competent authorities closer together. conclusions in conclusion, allow me to use a metaphor. national and european parliaments should be like two runners in a relay race. they are both essential in passing on the baton of legitimacy : in other words, they should cooperate as one team to ensure the legitimacy of the greater sharing of sovereignty that underpins

to the factors which could lead to long - term differences in inflation. i should like first to address briefly the issue of price level convergence. price level convergence could be expected to take place in the euro area for at least two reasons. first, the completion of the internal market and increased cross - border price transparency contribute to eroding the scope for the existence of substantial price differentials for products which are easily tradable across borders. to a large extent, this may have taken place already before the start of economic and monetary union ( emu ), but differences remain. one example of such a price convergence that has attracted public attention relates to car prices. secondly, with regard to goods and services which are less easily tradable across national borders ( such as housing and hairdressing ), the long - term convergence of productivity and living standards across the euro area would create a tendency towards price level convergence. countries with higher levels of economic development tend to have higher price levels for non - traded goods and services. while higher wages in the traded goods sector largely reflect higher levels of productivity, spillovers of wage increases to the non - traded goods and services sector often imply that wage levels in the economy as a whole will typically be higher in more developed economies. as the scope for increasing productivity growth is usually more limited in the non - traded goods sector, a general increase in wages as a result of productivity gains in the traded goods sector will raise the cost of producing non - traded goods and services. this leads to higher relative price increases for non - traded goods and services. in a dynamic context, as a less developed country is catching up with its neighbours, inflation in its non - traded goods sector could be rising more rapidly than in other countries, and as a result, inflation will be higher. this type of convergence normally takes place gradually and within certain limits among relatively homogeneous industrial countries, but could, of course, reach a much larger scale if differences in price levels among participating countries are more marked. 3. are divergent price developments a cause for concern? are differences in inflation among euro area countries a cause for concern? the short answer is, “ it depends ”. on the one hand, as i have just explained, differences in inflation rates among euro area countries had to be expected. they are in effect partly the result of the completion of the internal market and the creation of the single currency itself. on the other hand, if differences in inflation rates are quite large, they