in june is political union. in fact this is not a separate building block – it cuts across the entire discussion on other points. decisions that have fiscal consequences require democratic backing. any form of european control over national policies must be based on political legitimacy and strict accountability, in particular vis - a - vis the european parliament. we at the ecb are very well aware of the need for democratic accountability wherever power is delegated. the ecb ’ s new supervisory task must be matched by additional reporting and accountability channels. yet, i think the general issue here is one of clarification, rather than one of institutionbuilding. the notion that the euro is a currency without a state is in my view misguided. the euro is a currency with a state, only with a state whose branches of government are not yet clearly defined. here again, let me explain : as i underlined earlier, the euro was created to serve the single market. that market itself is a political construct. it not only presupposes the freedom to play a part in the market – that would be anarchy. it also presupposes the means to protect that freedom, such as the protection of property rights and the enforcement of contracts. for there to be a single market, there must be a legislative body that establishes the rules and a judiciary that can enforce them. if there is a legislative and a judiciary, there has to be an executive arm to implement their decisions. for a market to function, the three branches of government have to exist. this makes the single market a political union. what is not yet entirely clear in the case of the euro area, and apart from the ecb which has a clear but limited mandate, is who exactly will execute these powers, and to whom it will be accountable. as we move towards a genuine emu, this clarification will become ever more necessary. conclusion mr commissioner, ladies and gentlemen, there has always existed a debate as to whether the euro area is an optimum currency area. i think this is a flawed debate, if by optimum we mean perfect, because no currency area is ever perfect. the question we are facing is what the minimum conditions are to ensure the full viability of the euro area over time. as i said in my introduction, there has been increasing confidence in recent months that these conditions will be met. financial market participants have understood that there exists a political commitment to the euro. practical decisions are needed now to anchor this

gent sejko : seventh review of the arrangement with the imf concluded speech by mr gent sejko, governor of the bank of albania, at the joint press conference with the imf mission and the minister of finance, tirana, 22 march 2016. * * * in accordance with the agreed agenda, during the last two weeks, we have held intensive talks with the imf mission, which focused on the review of the arrangement with the imf. also, in the framework of article iv discussions, talks focused on identifying those structural problems that hamper economic development in albania. the review concluded that economic indicators and macro - economic policies have been in line with our projections and commitments, despite the challenges facing the albanian economy during this period. moreover, article iv discussions noted the need for accelerating structural reforms, which should pave the way for faster and steadier development. let me now present a summarized opinion of the bank of albania on the country ’ s economic performance and the policies we have implemented and should continue to implement in the future. the albanian economy continues to be on a positive development trajectory. economic growth accelerated during 2015, driven by the expansion of investments and improvement of the balance of trade with abroad. private consumption showed signs of recovery in the second half of the year, whereas public consumption remained limited, in accordance with the fiscal consolidation strategy. during this period, economic activity expanded, among others, thanks to the monetary policy and supervisory and regulatory measures by the bank of albania. our accommodative monetary policy stance has contributed to lowering interest rates further down, mitigating liquidity pressures and maintaining the confidence of financial markets in price stability. in parallel, our supervisory and regulatory measures have contributed to reducing non - performing loans and improving the financial soundness of the banking sector. these developments are a prerequisite for sustainable crediting to the economy in the future. inflation remains at low levels, below our target. this performance has reflected the unutilized production capacities in the albanian economy, and the disinflationary tendencies arising from trade exchanges with abroad. in particular, over the first two months of 2016, inflation dropped, descending to 0. 2 % in february. our analyses suggest that it dropped due to external factors, namely the pronounced fall in food and oil prices in global markets. as such, the rapid drop in inflation and its low levels represent a supply shock to the albanian economy, rather than a disinflationary situation, which