therefore, any move in this direction should be accompanied by a new convergence process towards more resilient economic structures. such a process would allow us to advance together towards a better - equipped emu, outlining a clear path of reform and a commitment to a fiscal capacity. political convergence is needed to kick off such a process, as any new convergence process can only be as effective as the legitimacy underpinning it. conclusion let me conclude by saying that protection against moral hazard is of course very important. at the same time, it should not be used as a strategy to relegate the move towards a fiscal capacity for the euro area to never - never land. the move towards a fiscal capacity could take the form of a gradual and conditional process that allows us to move in parallel towards restored fiscal buffers at the national level, convergence in the capacity to absorb shocks at the national level and a strengthening of institutions at the euro area level, while moving, equally gradually, towards more central fiscal stabilisation. see cœure, b. : “ drawing lessons from the crisis for the future of the euro area ” speech at “ ambassadors week ”, paris, 27 august 2015. bis central bankers ’ speeches i think we should be more ambitious in that respect. in fact, i would even argue that there is an urgent need to accelerate our efforts to complete the emu architecture with a fiscal capacity. although we should acknowledge that this will take time, and that getting it right will require effort and precision, we should act without delay and speed up our work. thank you for your attention bis central bankers ’ speeches

, and under what conditions it could function well. fiscal policies in emu the role of fiscal policies in emu has been at the core of the policy debate for some time now. fiscal policies span a broad range of issues, ranging from public investment and collective see cœure, b., “ time for a new lamfalussy moment ”, speech at the professor lamfalussy commemorative conference, budapest, 1 february 2016. see cœure, b., “ towards a political convergence process in the euro area ”, speech at the interparliamentary conference “ towards a progressive europe ”, berlin, 16 october 2015. bis central bankers ’ speeches goods – allocative functions that would also include the eu budget – to tools for macroeconomic stabilisation. today, rather than discussing what, broadly speaking, fiscal policy could do to support growth at the current juncture, i will focus on how well - designed fiscal policies in an economic and monetary union – where monetary policy is exercised at the european level – could act as an instrument for stabilisation. let me start by clarifying that the euro area today is not at a crossroads between two starkly different routes, namely, responsible national fiscal policies on the one hand and a common fiscal capacity or a euro area budget on the other, with the choice between the routes being based on political or philosophical priors. from an economic standpoint, these are complementary. and in fact, we already have elements of both. first, a precondition for fiscal policies to be able to contribute effectively to macroeconomic stabilisation is to ensure that markets have faith in the sustainability of public finances. and that is why adherence to, and the full and consistent implementation of, the stability and growth pact and fiscal compact is so important. as i have said before, this is not a matter of theology ; it is a political and economic imperative. markets need to trust the capability of our governance framework to effectively coordinate fiscal policies in emu, and citizens need to be confident that common rules are being respected. let me add that any common fiscal capacity will be financed by current or future taxes on the same taxpayers and companies which already fund their national budgets. we cannot add to this edifice if its foundations are shaky, that is, if national budgets are not clearly sustainable. in concrete terms, this means that member states should rebuild fiscal buffers into their national budgets to be able to weather future economic shocks, while at