onbekende naam voor documenteigenschap. first, private risk - sharing between member states should be strengthened. this involves completion of the banking union, by means of a european deposit insurance scheme. furthermore, i look forward to new european commission ’ s proposals to move towards a capital markets union. the potential contribution of these initiatives is multifaceted. in successful monetary unions they bear the brunt of any adjustment to asymmetric shocks, thereby relieving the burden from public sector stabilization policies. they will foster more efficient and sustainable cross - border financing flows, that will support potential growth throughout the euro area. and they will contain the risk of future imbalances. my second recommendation : it would be beneficial if future monetary and fiscal policy would, more so than in the past, move in the same direction. there is mounting evidence that monetary policy can reach it goals faster and with fewer side effects if it is aligned with fiscal policies. the combination of a unidirectional fiscal and monetary policy reaction to changes in economic conditions, can create an environment where both public and private investment can bolster economic recovery and support the growth potential. and thirdly, i should note that, at least at the current juncture, the emu ’ s design remains a compromise between limited risk - sharing and a large degree of individual control and hence accountability. this implies that member states will remain subject to market discipline. and this places a distinct responsibility on the shoulders of member states, to create the preconditions that enable their economies to flourish within the emu framework. judging by various measures of economic competitiveness, including ease - of - doing - business and strength of the legal system, structural and institutional reforms remain necessary to stimulate potential growth. so in short, it is all about addressing institutional imperfections within emu, improving the consistency between fiscal and monetary policies and kick starting structural economic reforms in member states. notwithstanding the political intricacies of these issues, they can only be solved with credible commitment from public policy makers. such commitment would enable the emu to start reaping the economic benefits today from solving the issues that we know we will be facing tomorrow. or in terms of the proverbial can : picking it up today will save us cleaning up an undoubtedly bigger clutter in the future, while living in a tidier place in the meantime. and on that positive note i would like to end my introduction. * * *

the fiscal rulebook and the introduction of the european stability mechanism were big steps towards further emu integration. however, in a semi - permanent mode of crisis - management, policy makers had little to no time to involve their constituencies. the magnitude of the euro area debt crisis was amplified by the fact that channels through which macroeconomic stabilization could take place, were insufficiently developed. as a result, a large part of the adjustment burden was placed on monetary policy. the interventions of the ecb have bought time to enhance the institutional framework and for individual member states to implement much needed reforms. the question however is, has this time been put to a sufficiently productive use? i am afraid that asking the question boils down to answering it. the underlying economic performance clearly suggests this not to be the case. since the start of the emu, convergence was visible between high - and low per capita income member states. when taking a closer look, however, we see that real convergence before the crisis was mainly based on the activation of more production factors, in particular in terms of an inflow of external capital flows into the euro area periphery. developments in total factor productivity, on the other hand, had negligible impact on the convergence of real per capita income. as we know from economic literature, productivity growth is indispensable for sustainable gdp growth. after all, it is the only source of sustainable increases in prosperity. but the inflow of foreign capital had mostly stimulated activity in less productive, non - tradeable sectors, including real estate. when these macroeconomic imbalances adjusted during the crisis, real convergence largely reversed. whereas now, after the crisis, real convergence has resumed in some parts of the euro area, we see that this reflects mostly a recovery in labor markets, while the cross - border flows of capital have stagnated and there are again few signs of a more efficient allocation of production factors. this suggests that member states are still not reaping the full benefits of their participation in emu and may leave their economies again vulnerable to shocks. in this light the recent slowdown in euro area activity, albeit largely caused by external trade shocks, is a firm reminder : further strengthening of emu is necessary. without additional action, once more monetary policy will risk ending up as the only, and perhaps stuttering, engine supporting growth. against this backdrop, i would like to finish my introduction with three recommendations, which i believe should be prioritized. fout!