. in the united states, smoothing is mainly undertaken by private investors and companies who, by diversifying their holdings across states, can mitigate recessionary pressures in their own state through financial income from other jurisdictions not hit by negative shocks. 7 the crisis has once again reminded us of a fundamental lesson : as the euro area is set to widen, it must strengthen its institutional structure. the most urgent task we face is to complete both banking union and capital markets union, thereby increasing cross - border ownership of assets and bringing about a more balanced financial structure. the diversity of the euro area would then become a source of strength rather than weakness, as financial holdings would be diversified across a wider set of countries and assets. moreover, the market would then cushion economic shocks, reducing the need for public money. but more integrated financial markets, on their own, are not enough. a monetary union as diverse as the euro area also needs a common fiscal instrument to maintain convergence when firms and households collectively retreat across the union. as the euro area widens and the preferences of its members become more varied, it may become more challenging to find agreement on such projects. this is due less to insurmountable differences – indeed, cultural diversity across the eu is estimated to be of a similar magnitude to that in the united states8 despite of the unifying role of language unity in the latter country – than to divisions in decision - making. this reinforces the case for building strong institutions with a clear mandate and full democratic backing, particularly as the euro area widens. an agenda for widening the euro area should thus be accompanied by an agenda for deepening, and the two should be treated together in policy discussions. ensuring that euro area accession is beneficial to all a deeper emu, however, does not absolve countries from their responsibilities. experience shows that adopting the single currency can give rise to significant opportunities. but opportunities are there to be used or to be wasted. history provides examples of both. ensuring 2 / 4 bis central bankers'speeches that new euro area countries meet the economic and legal conditions for successful membership therefore remains indispensable and, critically, is in everyone ’ s interest. and while it is important, of course, that countries adopt the eu ’ s body of law before joining the eu and fulfil the numerical convergence criteria before adopting the euro, these steps are not in themselves sufficient to benefit from membership of the eu and the euro area on a lasting basis. relentless efforts must be

isabel schnabel : interview in to vima interview with ms isabel schnabel, member of the executive board of the european central bank, in to vima ( greek daily newspaper ), conducted by mr angelos athanasopoulos and published on 4 april 2020. * * * the ecb recently decided to unleash its firepower once more to protect the euro area economy. the introduction of the €750 billion pandemic emergency purchase programme ( pepp ) is the latest in a series of measures, with the ecb having already announced an additional envelope for its asset purchase programme of €120 billion in net purchases until the end of 2020, on top of the monthly net asset purchases of €20 billion. why was an ad hoc, temporary programme like the pepp needed? the outbreak of the coronavirus ( covid - 19 ) has led to a humanitarian crisis, and has put enormous strain on the euro area economy and the financial sector. over the past few weeks, the outlook for the economy deteriorated sharply as countries had to intensify containment measures, dampening both production and consumption. this posed downside risks to the inflation outlook in the euro area. we also observed a sharp tightening of financial conditions at a time when the economy needed support. signs of financial fragmentation were re - emerging, impairing the transmission of our policy. we responded forcefully to this deterioration in the economic outlook by launching a new temporary asset purchase programme, the pandemic emergency purchase programme ( pepp ), which also includes purchases of greek government bonds. this helps stabilise financial markets, and contributes to much more favourable financing conditions, not least in greece, where interest rate spreads have dropped markedly. what are the main characteristics of the pepp? would you say that it is different from a typical monetary quantitative easing ( qe ) programme? if so, what are the differences? our existing asset purchase programme ( app ) was designed for normal times, providing monetary policy accommodation in order to support the gradual return of inflation to our aim. the pepp is a separate programme. it is our response to the extraordinary economic shock caused by the pandemic. the pepp is temporary, significant in size, and flexible. we expect it to run until we judge that the current crisis is over, but at least until the end of the year. one of the key aspects of the pepp is its flexibility. how do you respond to those who say that