also stands ready to adjust all of its instruments, as appropriate, to ensure that inflation continues to move towards the governing council ’ s inflation aim in a sustained manner. completing economic and monetary union to reap the full benefits from our monetary policy measures, other policy areas must contribute decisively to raising the longer - term growth potential of the euro area and reducing its vulnerabilities. sound fiscal and economic policies at the national level are the first line of defence to make the euro area stronger. economic reform needs to be substantially stepped up in euro area countries to increase resilience, reduce unemployment in a lasting way and boost productivity. on the fiscal side, member states often fail to make sufficient use of economic upswings to build fiscal buffers. this leaves those with fragile fiscal positions ill - prepared to face economic downturns. at the current juncture we expect the aggregate euro area fiscal stance to be mildly expansionary in 2019, which provides welcome support to economic activity at a time when growth has decelerated. however, the aggregate picture masks the suboptimal differentiation across countries. in particular, countries with high levels of debt are, with few exceptions, not building fiscal buffers, thereby risking a repeat of the mistakes of the pre - crisis period. countries with fiscal space could use some of it to strengthen public investment and increase their growth potential. the european fiscal board has recently issued a report1 recommending a broadly neutral euro area fiscal stance for 2020, based on the expectation of a gradual pick - up in economic activity as of the second half of 2019. this is also our baseline scenario, but we are aware that it is surrounded by a multitude of downside risks. if those risks were to materialise, additional fiscal support may be needed. to be clear, such support should come from countries that have fiscal 2 / 4 bis central bankers'speeches space. but while not all countries have the space to spend more, all have the opportunity to spend better. the euro ’ s benefits, however, will not fully materialise for as long as the architecture of emu remains incomplete. material progress has been achieved in recent years. the european stability mechanism provides an important safeguard and reforms currently under discussion will strengthen its precautionary and crisis resolution toolkit. the creation of banking union, meanwhile, has considerably strengthened the resilience of the euro area financial sector and, together with the bank recovery and resolution directive, has created instruments to combat banking crises in a

positions which are controversial and prone to manipulation2. simpler and more credible and effective rules are needed to ensure that euro area countries safeguard fiscal sustainability and build the necessary buffers to create room for countercyclical stabilisation in economic downturns. recent proposals 3 / 4 bis central bankers'speeches to focus the fiscal framework on a debt anchor complemented by an expenditure rule deserve further consideration. 3 emu also needs a central fiscal stabilisation mechanism to enhance countercyclical stabilisation during severe recessions. past experience shows that the aggregate fiscal stance in the euro area is often suboptimal. during the european debt crisis, for example, it was strongly contractionary, thereby reducing the effectiveness of an expansionary monetary policy stance. while the euro area budgetary instrument currently under discussion is a welcome step to support convergence, it is not designed to fulfil this stabilisation function. work on the fiscal architecture of emu therefore needs to continue to ensure that fiscal policies can play an effective stabilisation role. conclusion let me conclude. the euro, which celebrates its 20th anniversary this year, enjoys broad support among european citizens, with three in four people in the euro area in favour of it. its growing popularity is testimony to the fact that people have trust in the currency and in the ecb ’ s strong commitment to price stability, which supports investment and job creation. to preserve this trust, we need to step up our efforts at both national and euro area level to strengthen the architecture of the single currency. much has been achieved but some of the failings that caused and perpetuated the crisis remain unresolved. at a time of heightened global uncertainty, completing the euro area ’ s architecture is also necessary for europe to be able to achieve its other objectives. europeans won ’ t be able to foster cooperation on security and defence, or to speak with one voice on international affairs, or to complete the single market if they repeatedly have to tackle economic crises which are largely of their own making. a sound and sustainable euro area will help redirect political capital where it is most needed. thank you. 1 see the european fiscal board ’ s latest assessment of the prospective fiscal stance appropriate for the euro area, published on 25 june 2019. 2 see b. cœure ( 2018 ), “ scars that never were? potential output and slack after the crisis ”, speech at the cepii 40th anniversary conference, paris, 12 april. 3 see