those with particularly high emission shares. chart 3 market portfolio vs. ecb holdings vs. sectoral emission intensity source : papoutsi, piazzesi, schneider ( 2021 ). data sources : ecb ( shs & csdb ), eurostat, orbis. notes : market shares measured as capital income by sector. emission intensity measured by scope 1 air emissions by sector. “ dirty manufacturing ” = oil & coke, chemicals, basic metals, nonmetallic minerals. other manufacturing = food, beverages, tobacco, textiles, leather, wood, paper, pharmaceuticals, electronics, electrical equipment, machinery, furniture, construction, and other manufacturing. the emission bias of the ecb portfolio appears to be driven by the underlying structure of the bond market. the issuance behaviour of large firms in emission - intensive sectors systematically differs from firms in other sectors : they are more likely to enter the bond market, not least due to their high level of fixed assets that can serve as collateral. the higher bond issuance by emission - intensive firms translates into a higher emission intensity of both the cspp - eligible universe and the ecb portfolio ( chart 4 ). chart 4 market portfolio vs. ecb holdings vs. cspp eligibility vs. bond market source : papoutsi, piazzesi, schneider ( 2021 ). data sources : ecb ( shs & csdb ), eurostat, orbis. notes : market shares measured as capital income by sector. “ dirty manufacturing ” = oil & coke, chemicals, basic metals, nonmetallic minerals. other manufacturing = food, beverages, tobacco, textiles, leather, wood, paper, pharmaceuticals, electronics, electrical equipment, machinery, furniture, construction, and other manufacturing. in light of these empirical results, there is a case for considering how to mitigate the emission bias induced by the traditional market neutrality principle. proposals range from the exclusion of emission - intensive sectors to more sophisticated “ tilting ” approaches, which have the advantage of retaining incentives of the most emission - intensive sectors to reduce their greenhouse gas emissions. [ 19 ] beyond the net asset purchase phase, such approaches could still be applied to reinvestment under the asset purchase programmes. these proposals do not dispense with the market neutrality principle but replace it with a more appropriate benchmark that would start to reflect the significant societal costs associated with climate change. without prejudice to the objective of price stability importantly, such actions must not prejudice the primary objective

the erm crisis in the early 1990s showed – countries realised they could not integrate in part and benefit in full. the financial and sovereign debt crises since 2008 have only reaffirmed that truth. so the answer is not to unwind integration. nor is it to hold out an unattainable vision of where integration should lead. it is to complete our monetary union in the areas where it can and needs to be completed. we need ambition in our ends and pragmatism in our means. we have already shown how this can be done with the solidarity and stabilisation mechanisms that were set up during the crisis. banking union is also a remarkable achievement. now we need to make progress in the other areas that remain unfinished, notably in terms of economic and institutional convergence. still, i recognise that we cannot have a purely economic perspective on the questions facing our union. while economic integration produces more jobs and growth on aggregate, this does not completely solve the problem that drives dissatisfaction with the euro and the eu. there is also the problem of distribution : who gains and who loses from that process? for example, higher labour mobility across countries might reduce unemployment, but it can also stoke fears about immigration and create insecurity for low - skilled workers. opening up a previously protected sector might reduce costs for consumers, but it can also leave citizens employed there with an uncertain future. so, if we are to build lasting confidence in our union, we still need to address this tension – to reconcile the economics of integration, which is about efficiency, with the politics of integration, which is about equity. bis central bankers ’ speeches this is a complex issue, but a solution can be summed up in one word : skills. theoretical and empirical research both suggest that recent technological change has been skill - biased. in other words, production technology has shifted in a way that favours skilled over unskilled labour, by increasing its relative productivity and therefore its relative demand. equipping workers with the right skills therefore makes the economy more efficient and creates new job opportunities. and it also makes the economy more equitable by allowing as many citizens as possible to participate in those opportunities. for this reason, education and training need to be as much a part of the reform agenda as creating more flexible markets and reducing red tape. but there is also a second way in which the economics and politics of integration need to be reconciled. the more decision - making over economic issues moves to the european level, the more