the union to insure against the impact of asymmetric shocks since it provides opportunities for diversification of income sources. if members of the monetary union hold claims on other countries within the union, then the income effect of any asymmetric shocks would be mitigated. the introduction of the euro has helped make euro area financial markets more integrated. the money market has been almost perfectly integrated since the formation of monetary union. the significant growth of the euro corporate bond market also provides evidence of integration and widens the range of potential investors to which firms have access. national bonds and equity market returns exhibit closer co - movements than they did prior to the introduction of the euro. the main area where financial integration has lagged is that of retail banking where, in spite of an increase in cross - border mergers and acquisitions in recent years, cross - border activity remains relatively limited. forces for further integration will continue, as market participants increasingly exploit the new environment of monetary union. in addition, a number of initiatives, supported by the eurosystem and / or the commission, are further encouraging integration. an example is target2, the new payment platform for the financial system, which began operating in november 2007. as integration proceeds, we can expect that monetary transmission mechanisms across the euro area will continue to converge, helping the implementation of the single monetary policy and bringing the euro area closer to an optimum currency area. ronald mckinnon, in 1963, added the criterion of openness. the more open the economies of a monetary union, the less effective nominal exchange rate changes will be in facilitating adjustment because the changes are more likely to feed onto domestic prices and wages, offsetting the competitiveness gains. recent empirical evidence, however, has shown that a common currency ( as opposed to separate currencies tied together with fixed exchange rates ) can promote openness, or trade integration. the basic intuition underlying this view is that a set of national currencies is a significant barrier to trade. in addition to removing the costs of currency conversion, a single currency and a common monetary policy preclude future competitive devaluations, and facilitate foreign direct investment and the building of long - term relationships. these outcomes, in turn, can promote ( over - and - above what may have been attained on the basis of the elimination of exchange - rate uncertainty among separate currencies ) reciprocal trade, economic and financial integration, and the accumulation of knowledge. greater trade integration can increase growth by increasing alloca

soon, ultimately reaching a flat tax rate of 15 % and remain locked at the same level for another five years. the drastic reduction in corporate tax rates and the commitment to leave them unchanged for a period of five years will be the best signal to greek and foreign investors that the greek authorities are now seeking to change the country ’ s growth paradigm and move towards a dynamic economy based on private investment and exports. this drop in taxes could be financed by the fiscal space achieved through a decrease in primary surpluses, say, to 2. 5 % from 2020 onwards, bringing effectively forward a year or two the agreed - with - our - lenders lower primary surpluses, or from a persistent overshooting of agreed surplus targets of 3. 5 % of gdp until 2022. much to my delight, the above proposal that links lower corporate taxes to lower primary surpluses has been adopted by the bank of greece in may 2016 and by the main opposition leader at deth in thessaloniki in september 2016. c. the role of the ecb in countries under adjustment programmes as the euro area crisis was triggered by either a weak fiscal position in some cases or a weak banking system in others, it led to the “ negative feedback loop ” between banks and sovereigns, which the ecb emerged as the institution best equipped to tackle. it has used all the appropriate instruments at its disposal in order to ensure its primary priorities : price and financial stability across the euro area. c. 1 the role of the ecb on price stability 1. reducing base rates first of all, and since the emerging of the financial crisis in 2008, the ecb has reduced its main refinancing rate from 4. 25 % to 0 %, the largest cut ever decided over such a short period in europe, and also brought the interest rate paid on banks ’ deposits of excess reserves with the eurosystem to negative territory, - 0. 40 % today. 2. smp programme furthermore, as sovereign bond markets in some euro area jurisdictions were becoming increasingly dysfunctional, in may 2010 the ecb approved the securities market programme ( smp ) worth €210 billion. its main effect was to cut refinancing costs for countries whose bonds were sold at unsustainable interest rates on international markets, leaving at the same time the money supply unchanged through sterilisation. 3. ltros and tltros in december 2011, the ecb revived the longer - term refinancing instrument making the central