a “ strong representation of fiscally conservative voters ”. but how can we implement this? in principle, by building a wide consensus on the advantages of fiscal discipline we may actually induce voters to punish policy - makers who do not deliver it. asking voters to agree on fiscal consolidation packages without convincing them of their advantages is not straightforward. but well - designed, stable and easy to apply fiscal rules can contribute to the emergence of a public consensus in favour of policies aimed at fiscal sustainability. in the second part of his lecture leszek balcerowicz focuses on the problem of sovereign debt in the eu, analyzing three main aspects : ( i ) the management of the greek crisis ; ( ii ) the development of a debt resolution mechanism in europe on the heels of the greek experience ; and ( iii ) longer term solutions for the stability of the euro area. according to balcerowicz, a double standard emerged between euro - and non - euro countries in the eu. the vulnerable fiscal position of some euro - area countries led to the fear of contagion. after a lengthy debate and with a significant delay, the possibility of an imf intervention was finally accepted. for non - euro countries, where the risk of contagion was considered modest, the application for imf conditional loans was not controversial. in the case of euro - area countries, however, such as greece, a complete set of intervention options was never put on the table ; some options were not considered at all, basically due to motives of prestige. committee for the study of economic and monetary union ( 1989 ), p. 20. with reference to the second point, balcerowicz charges that the european financial stabilisation mechanism ( efsm ) is inconsistent with the letter of the article 122. 2 of the treaty. he also criticizes the ecb ’ s securities market programme as a possible threat to its reputation. finally, turning to the analysis of long - term solutions, he advocates a proper institutional setting able to avoid pro - cyclical policies. structural reforms should be implemented to spur long - run growth and to promote the adjustment of the economy to shocks. it is quite difficult to assess a single article of the treaty out of context. the consistency of the efsm with the letter of the article 122. 2 could be debated, but it is evident that the efsm complies with the spirit of the treaty, given the importance of the proper functioning of the eu and its very existence.

a country from brussels can be politically difficult when all seems to be going well. this is an area in which national independent authorities could have a role. a very important issue concerns the lessons we have learnt from the crisis for the design and the conduct of our monetary policy, as well as for its interactions with macro - prudential policies. if anything, the crisis has confirmed that we should firmly stick to our objective to deliver price stability in the medium term. indeed, the credibility of the eurosystem in pursuing this objective was crucial in allowing us to adopt exceptional measures without compromising the anchoring of inflation expectations. the crisis has also shown how important it is to interpret credit and money developments properly and take them into account in our decisions, in particular by “ leaning against the wind ” in case of credit booms and asset price imbalances. this is embodied in the eurosystem setup, insofar as the careful monitoring of monetary and credit aggregates helps to identify risks both to financial and price stability. a crucial issue is how to detect the accumulation of systemic risk in time. i am confident that the new framework based on the esrb will provide a fundamental contribution in this respect. enhanced interaction among macro - prudential bodies, between them and the micro - prudential authorities, and between macro - prudential and monetary policy authorities will be crucial. with reference to the ecb ’ s securities market programme, suffice it to say that developments in financial markets called for special interventions. the programme is in line with the shared principles of european monetary policy - making and does not represent a change in the monetary policy stance. the current financial crisis has been described as valuation crisis. in fact, bond spreads for several euro - area countries widened beyond any reasonable level, and severe tensions in the bond market hampered the monetary policy transmission mechanism, demanding action by the central bank. however, a very important and more immediate issue is the exit from the exceptional monetary policy measures that have been adopted. all the various non - conventional measures that central banks, including the ecb, have taken over the last years have been directed at avoiding a financial and economic collapse. that collapse has not materialized. the relevant issue now is the timing and speed of the exit from these measures. this will have to be guided, on the one hand, by the need to maintain support for the orderly functioning of the money and financial markets and to sustain credit flows to the economy, and, on the