tendency to perceive others ’ problems and their solutions based on one ’ s own situation, i. e. on the individual country ’ s specific situation. in other words, the evaluation of the whole is based on an evaluation of its parts, instead of, as would be desired, evaluating the whole situation and its interaction with each of its parts. as is known, the whole is greater than the sum of the parts. for this reason, considering the whole from the viewpoint of one of the parts is necessarily simplistic and biased. the crisis has highlighted the tendency of all member states to bring their own ways of facing the problems and their own a priori considerations to group discussions. in this context, the particular problems and the specificity of the viewpoints tend to take precedence over the vision of the whole. therefore, inter - member state balance has been contaminated by the rationale of relative size, which runs counter to the rationale underlying the european union. bis central bankers ’ speeches we cannot have an emu with an institutional framework that, instead of promoting the resolution of the problems, exacerbates them and, in some cases, makes them self - fulfilling. in this instance, the adjustment costs are considerably worsened, from the point of view both of each part and of the whole group, either the euro area or the european union. the second message is that the constitutional rules contained in the treaties are the basis for mutual trust among the member states composing the european union. the rules forming the basis for mutual trust in the emu are enshrined in the treaties, ranging from the maastricht convergence criteria and european central bank statutes, with regard to monetary policy and financial stability objectives, to the ceilings on fiscal deficits and public debt set out in the treaty on stability, coordination and governance. facing such diverse economic, social, cultural and political situations, european countries have had to base their notion of belonging and therefore mutual trust on rules that ensured the relationship among group members was balanced, eliminating both hegemony / dominance risk and moral hazard ( the attraction of free riding ). thus, shared sovereignty, aggravated by different preferences and different institutional frameworks and cultures, has imposed the need to identify the required minimum conditions for the functioning of the monetary union. this means that the group had to adopt rules not deriving from market sustainability principles, but rather from the need to install and operate self - imposed mutual - trust mechanisms. the observance of these rules,

of the “ public finance council ” would have to be decided by the eurogroup, which, as i have mentioned before, should be responsible for the aggregate ’ s economic policy and its consistency with national policies. the fifth message that i would like to convey is that, in order to act quickly and decisively in times of crisis, we must establish a european monetary fund. we must take an institutional leap and turn the european stability mechanism into a european monetary fund, so as to put in place a specialised entity to manage imbalance situations that a member state may have to overcome. imbalances may occur following the adoption of national policies that are unsustainable in the long run, due to asymmetric effects bis central bankers ’ speeches of common shocks or specific shocks resulting from circumstances outside the scope of economic policy - makers. in such cases, there must be an institution independent from member states, empowered and qualified to negotiate with the country in question on matters of financial assistance with associated conditionality. empowered, in the sense that it cannot depend on the approval, by national parliaments, of conditions and amounts needed for that purpose ; and qualified, in the sense of having the technological and technical means that make it possible to act in a quick and informed manner. the adjustment programme should be defined on the basis of a contractual approach ( and not by imposition ) to ensure the policy ’ s ownership by the beneficiary country. the existence of a european monetary fund would help turn conditionality into the joint adoption of a programme of internally consistent adjustment policies that are also consistent with the restoration of a resilient convergence path towards compliance with the group ’ s underlying rationale, which i previously called constituent rules. the creation of a european monetary fund, with a clear mandate, means and independence of action from member states and removed from the concept of guardianship, will put in place the necessary conditions for the development of win - win solutions, which is a pillar for the aggregate ’ s cohesion. final remarks in conclusion, i would like to stress that, when reflecting on the policies and the governance framework that are crucial to guarantee europe ’ s prosperity, we must separate what is possible from what is desirable. i have focused my speech on what is possible, but i would like to approach an issue that falls within the scope of what is desirable, in other words of what is impossible right now but indispensable in the medium run. i mean the need to reflect on faster