in the eu : from 9. 5 % in 2009 to less than 1 % in 2015. romania exited the excessive deficit procedure in 2013 and also in 2013 reached the medium term objective of 1 % of gdp structural deficit, down from 8. 8 % of gdp in 2009. since i was the budget minister in 2013 and for most of 2014, and i was responsible for the imf and ec negotiations, i can praise the role played by the imf and the ec in the three successive agreements ( 2009 – 2015 ). the current account adjustment was also impressive, from – 13 % in 2007 to just – 1 % in 2013 – 2015. however, in the last couple of years, the trend of fiscal consolidation has been reversed. this has also impacted the current account, which has deteriorated by 2. 2 % of gdp, of which 2. 1 % of gdp came from the budget deficit widening. the main advantage of the country is its low level of public debt, but this can be reversed in the medium term unless a prudent policy mix is implemented, including a gradual return to mto. broadening our perspective, all eu countries have adjusted their budget deficits over the last 10 years. most of them also adjusted their current account deficits. in fact, the downsizing of current accounts can be attributed to both public and private sectors. this means that aggregate demand was affected for a longer period, and measures to stimulate it, when the economies experienced negative output gaps, were needed. despite very low interest rates, credit was not a main driver of the recovery ; and public investments, as the report outlines, are on average 2 percentage points of gdp lower than their pre - crisis levels. although it is nowadays a demand - led recovery, we do not have sufficient demand - push inflation, with the notable exception of countries that have closed the output gap – and these are the new member states. this justifies the report recommendation of further accommodative policies from the ecb. however, as mr. thomsen highlighted in his presentation, policymakers need to seize the good times to advance further with fiscal consolidation and structural reforms. but the low rate environment and the strong sovereign - bank nexus are feeding the beasts and provide the wrong incentives for reforms. this is where policy trade - offs step in. monetary policy has been overburdened in times of crisis, trying to address the market failures and the pro - cyclical fiscal policy. yet, monetary policy is not

target level until the wage gap is closed. for philips curve to work, the loss of welfare from a negative wage gap has to be fully compensated first – as a stock measure, not as a flow. the policy recommendation from here is that countries which closed their wage gap should be much more prudent in further wage increases – because they will be seen in inflation much faster and larger than in the recent past. and for countries which have not closed their wage gap the implication is 3 / 5 bis central bankers'speeches that inflation will remain subdued until this happens. i fully agree with the imf ’ s recommendation that central banks in nms with their own currencies should be alert to the inflation risks of higher wage growth, while bearing in mind that raising policy rates could trigger capital inflows and exchange rate appreciation – which could further deepen current account imbalances. while the real monetary policy stance may differ between euroarea and emerging europe, there is broad heterogeneity even among emerging europe. this is why it is important not to give the wrong incentives to capital flows. this reminds me of my days as a child when, being asked what i want to become when i grow up, i confessed that i wanted to be a firefighter. it turns out that i am now a central banker, which is not far from being a firefighter in these uncertain times. national bank of romania has started the tightening cycle of the monetary policy, to contain the higher inflation and inflation expectations. although most of it is supply - side and temporary, and fighting fiscal loosening with monetary tightening is a sub - optimal policy mix, we considered that the 3 rate hikes we implemented this year were warranted to preserve a hard - fought public good : price stability. coming to an end of my intervention, i would like to express a few thoughts on one of the most important remarks of the reo. it states that “ the recovery provides an opportunity to move faster to deepen the economic and monetary union ”. the report details three lines of action in this regard : completing the banking union, creating a central fiscal capacity, and advancing with the capital union. too much financial innovation, deregulation and the blind, theological belief in self - regulating markets have brought us here, back to the era of re - regulation ; but coordination is needed for that, and glexit is threatening this coordination. it is however undeniable that the completion of the banking union