strengthen further the euro area dimension of surveillance and policy adjustment. the euro area dimension must entail even greater automaticity, accelerated timelines and reduced room for discretion in procedures. it must foresee country missions and the possibility of sanctions at earlier stages in the macroeconomic surveillance framework ; greater independence and quality controls in underlying analysis ; and stronger powers in case of questions over statistics. this is our assessment in a nutshell. since the matter is so important for monetary union, i would like to give you also our more detailed assessment, which can be summarised in four points. first, on fiscal surveillance, more is needed to enhance enforcement procedures. specifically, all deadlines under the excessive deficit procedure should be significantly reduced ; sanctions should be applied quasi - automatically on the basis of clearly defined criteria, without scope for discretion through “ exceptional circumstances ” or waivers ; and the debt reduction should in some cases be more ambitious than proposed by the commission. second, on macroeconomic surveillance, the procedures need to be straightforward and use a maximum of analytical intelligence. thus, on top of what the commission has proposed, it is crucial that the framework focuses on countries with vulnerabilities, competitiveness losses and high debt levels. vulnerabilities can be detected on the basis of a limited number of indicators ; and when the indicators reveal potential problems, they should automatically trigger an in - depth analysis of the country concerned, including missions of the commission in liaison with the ecb and public scrutiny. finally, to reinforce compliance, graduated sanctions should come into play at an earlier stage. third, the quality and independence of economic analysis is essential. therefore, it would be important that commission services conducting macroeconomic and fiscal surveillance for the euro area have some independence, for example the same independence as the commission competition services. a body of “ wise persons ” should be created to provide external assessments ; and the code of practice for european statistics should be enshrined in a regulation, ensuring that weak spots in data collection and reporting are addressed immediately. fourth, and as the final point, member states should anchor the new surveillance framework in national legislation. beyond the minimum requirements for budgetary frameworks proposed by the commission, it is essential to introduce rules - based, medium - term frameworks and establish independent national institutions assessing fiscal policy. implementing the most ambitious reforms possible under the current treaty is in the deepest interest of the euro area countries. 5. conclusions let me conclude. if i were to summarise the

led to the global financial crisis. it could do so based on a high degree of analytical depth and information sharing at a global level that the bis and the basel committees have been able to develop over time. in my opinion, these analytical contributions have played a very significant contribution to form the strong and coordinated policy response that we have witnessed during the financial crisis. 2. 3 where the system has fared less well : regulatory arbitrage and global imbalances as much as global governance appears to have passed the severe test of the global financial crisis, we should not remain oblivious to the fact that there were significant shortcomings that have contributed to create the conditions for the crisis to happen in the first place. i will mention, in particular, two dimensions : the insufficiencies in terms of financial regulation and international coordination, on the one hand, as well as the constellation of global imbalances, on the other. let me deal with both in turn. the lack of integration and coordination in financial regulation was pervasive before the crisis, even though this was not properly appreciated at the time, and has encouraged financial institutions to engage in a large degree of regulatory arbitrage. 2 this was the unavoidable result of the fact that, while finance was becoming more and more global, with some financial institutions having operations in dozens of jurisdictions, financial regulation has remained largely national, with only some form of mild and non - binding coordination at the european and international level. later, i will discuss how the international community is addressing this problem, in particular, under the leadership of the financial stability board and of the basel committee. as regards global imbalances, the deficiencies of macroeconomic policies as regards economic and financial medium - term stability and sustainability, led to the build - up of unsustainable external imbalances among key deficit and surplus economies prior to the crisis. a number of advanced economies have engaged in macro - policies that are imbalanced and marked by a structural lack of savings. on the other hand, excessive reserve accumulation by emerging countries have contributed to make global imbalances too easy to finance, resulting in compressed global interest rates and ultimately in too high risk taking and leverage in those ( advanced ) countries that were receiving a large degree of capital inflows, ultimately contributing to pave the way for the financial crisis to unfold. moreover, there was a distinct perception of a lack of an effective mechanism to influence macroeconomic and structural policies