make important decisions when faced with necessity, during critical situations. let us hope that it is possible to dispel that perception, by taking full advantage of the existing proposals and ongoing debate – which should be open and inclusive – to adopt the necessary measures to improve the working of the european union and, in particular, the economic and monetary union. in fact, we should avoid doing so under pressure from a new crisis. only the future will show if we are able and willing to make the necessary decisions so that the european union will be the “ community of destiny ” as joseph weiller put so well, and as its founders intended. thank you for your kind attention. 4 / 4 bis central bankers'speeches

the european monetary union although euro banknotes and coins only began to circulate in 2002. portugal was among its eleven founding member states. for millions of young european citizens the euro is the only national currency they know. it is common knowledge that the establishment of the economic and monetary union was the most far - reaching political step in the history of european integration. likewise, we have always known that the architecture set up in maastricht was incomplete and risk - inducing, particularly due to the absence of mechanisms to cope with asymmetric shocks. its architects implicitly admitted that the missing components would sooner or later be added, as a result of the integrationist momentum. however, history has repeatedly proven that determinism can be a mistake... up until the onset of the financial crisis, we lived under a kind of ‘ spell ’. in many countries, the decrease in interest rates boosted indebtedness, while there were illusory improvements in living conditions. neither the economic agents nor the authorities managed to clearly perceive that the monetary union would necessarily entail a new economic regime : the centralisation of monetary and foreign exchange policies warranted a completely different policy mix. fiscal and income policies acquired greater importance, but, in fact, fiscal policy was also subject to heavy constraints. when the international financial crisis broke out, it progressed rapidly, quickly exposing and enhancing the accumulated imbalances within the union. the response to the crisis focused on strengthening the coordination between fiscal policies, the development of new financing mechanisms, and the establishment of the banking union and, of course, non - standard monetary policy measures. this was far from insignificant, but, in some cases, it was perhaps a little late and surely was not enough. in many ways, we were entering a new territory as it was with the implementation of adjustment programmes, which pose unique challenges in countries within a monetary union. we need to drive the economic and monetary union reform forward. it is indeed time for reform. part of this reform merely consists in finalising the previous cycle of reforms by completing the banking union with the implementation of its third pillar and by endowing the single resolution 3 / 4 bis central bankers'speeches fund with the adequate financial resources to fully accomplish its mission. no debate is more sterile than the one on whether to reduce or to share risks. in truth, we must do both. and, in some ways, we have been doing just that. as many contend, it is human nature to only