. estonia has shown a remarkable capacity to take difficult political decisions when they are needed. this, i believe, was widely recognized and respected, and helped pave the way for estonia to join the monetary union. it also bodes well for estonia ’ s future in emu. boom and bust my third observation regards another factor that also bodes well for estonia as part of the euro area : the recent boom and bust episode in this country. estonia went through a very classical cycle of low interest rates, easy credit, and unrealistic expectations, which eventually built into a substantial overheating of the economy, and finally a spectacular bust in 2008 – 2009. some countries experienced this as part of the monetary union, while estonia experienced it all by herself. i am optimistic that the experience will prove to be a vaccination against future financial excesses. the finnish depression in the early 1990s resulted in suffering and economic hardship for many, but it also re - established a more cautious economic attitude that resulted in stronger balance sheets, and ultimately a stronger economy. finland received a vaccination against financial excesses that has lasted well over a decade. i am optimistic that estonia will benefit from a similar vaccination, and will emerge from the recession as a stronger economy. only the beginning my fourth observation is that this is only the beginning. a lot is going on inside the euro area and the eurosystem. economic policy coordination is being given much greater traction than before. in particular, the crisis has shown that a group of countries with a common currency and highly interconnected banking sectors have a great deal of interest in each others ’ public finances. how each country chooses to allocate its public expenditure remains mostly its own business. but how a country finances its public expenditure must be a matter of common interest to a much greater degree than we were willing to acknowledge in the past. enhanced economic governance, including the european semester, creates a framework for ensuring that budgetary policies take into account the common european interest. i trust estonia will be a like - minded partner for all of us who will ensure that this framework will work as intended. i am also looking forward to working with the governor of eesti pank on the european systemic risk board that will be established as of the beginning of next year. we have high expectations for this new body. the financial crisis showed that there is a considerable gap between microprudential supervision and monetary policy. we need stronger policy instruments to tackle fluctuations in

in the finnish economy. had the global investment boom, which “ asymmetrically ” strongly favoured finnish exporters, lasted two more years in the latter half of the decade, we would probably have seen wage inflation accelerate and a house price bubble emerge in finland, too. the bottom line the bottom line of these remarks is that membership in the monetary union has had a stabilizing effect on the finnish economy over the past 12 years. however, membership in itself does not guarantee stability and growth. what economic policy could and should do, both inside and outside the monetary union, is to prevent the emergence of excessive indebtedness in both the public and the private sector, and the development of asset price bubbles. on both sides of the gulf of finland, we know from experience that this is not an easy task.