this direction. ° ° ° the efforts being made in europe and in the countries worst hit by the crisis can succeed only if all the parties involved keep full faith with their commitments. in the end, budgetary adjustments without structural reforms would inevitably be counterproductive. however, the reforms will be unable to work their effects in full if doubts and uncertainties about the future of the single currency were to keep sovereign spreads far above the levels consistent with each country ’ s economic fundamentals. monetary policy can constitute an effective bulwark against such distortions. but its benefits can be lasting only if budgetary discipline and national and european reform proceed with the necessary determination. bis central bankers ’ speeches

, which fuel doubts about the sustainability of their public debt, and the incompleteness of the european construction, which is the source of broader fears that the single currency may be reversible. to address the first risk, the authorities in the countries most exposed to the crisis have taken resolute action to adjust the public finances and mend structural shortcomings. in italy the measures taken since the second half of 2011 to consolidate the public finances and the major package of structural reforms now being enacted have helped stanch the loss of confidence in our economy. the budget measures could not but have negative repercussions on short - term economic developments, but they averted far bleaker scenarios than the current one. in the medium term, the structural reforms will sustain the country ’ s growth potential. it is vital that the announced budget targets be met, the reform programme implemented in full and its scope widened even further. to definitively dispel fears about the solidity of monetary union, it is essential to proceed, with the necessary gradualness, from economic and monetary union towards political union, via reform of economic governance and banking and fiscal union. this is a project for the long term. the persistence of tensions in the sovereign debt markets during its implementation could compromise the uniformity of monetary policy transmission, as the experience of recent years has shown. to avert this risk, the governing council of the ecb approved outright monetary transactions ( omts ). this has already had important effects, as is attested by the signs of renewed interest in italian government bonds on the part of foreign investors and the consequent narrowing of the spread between btps and bunds. given that the fears of euro reversibility are bound up with those for the sustainability of the public finances of member countries, the start and continuation of omts is conditional on the assumption and respect of specific commitments regarding the public finances and structural reforms. as i noted, we are mindful that a definitive solution to the euro - area crisis requires the completion of the european construction. much has been done with the reforms of economic governance aimed at strengthening budget coordination and extending bis central bankers ’ speeches multilateral oversight to macroeconomic imbalances. banking union represents a further, important step in breaking the link between the conditions of sovereign states and those of banks and in consolidating the financial stability of the area. banking union will mean a single mechanism for banking supervision and a european blueprint for the resolution of banking crises,