economic stability, but it is not sufficient. governments also need to practice the right economic policies. bis central bankers ’ speeches an ongoing question is how much responsibility for economic policies should be elevated to the european level. for banking supervision and resolution there is a strong case for centralisation. clearly, the euro area also needs solidarity mechanisms for extreme events that are out of reach of national policies – that is the role of the european stability mechanism. and i see scope for common projects with a common funding if they enhance the resilience of the single currency area and come with appropriate democratic control. but beyond that, i do not see a strong case today for further fiscal centralisation. there are three reasons for this. first, fiscal discipline starts at home. most citizens do not want decisions on taxing and spending to be made at the european level, at least for the time being. this means that governments have to take responsibility for delivering sound budgetary policies. europe has a role to play in guiding governments in the right direction. but we know the stability and growth pact was not properly enforced. that is why i am encouraged by the approach taken in the fiscal compact. this enshrines balanced budget rules in national constitutions or equivalent, under the vigilance of independent fiscal councils. the second reason why i do not see a strong case for fiscal centralisation is that economic adjustment can and should take place via flexible markets. if countries introduce structural reforms that allow their economies to adjust more quickly to economic downturns, there is less pressure on their national budgets, and hence less need for external budgetary support. and flexibility does not mean social unfairness. too often, what delays adjustment is resistance by insiders who have managed to capture an unfair share of national wealth and oppose economic change. the third reason is that you do not buy an insurance policy when your house is already on fire. fiscal centralisation can be properly discussed only when euro area countries, large and small, have put their houses in order fiscally, financially and economically. the good news is that it seems governments have understood the message. budgets are being consolidated. structural reforms are being introduced. competitiveness is being regained. for example, the countries under full eu - imf programmes have seen their unit labour costs fall by more than 15 percentage points since 2009 relative to the euro area average. exports in portugal and spain are up by more than 20 % since the start of the crisis. but reform is not a medicine only

, namely the interest rate decisions, which are designed to deliver price stability, and the non - standard measures, which are designed to help restore a better transmission of our monetary policy, taking into account the abnormal functioning of some markets. question : how is the ecb ’ s room for manoeuvre influenced by the poor condition of public finances in euro zone countries, and especially in the countries with acute crisis? as i said, we are not compromising on our primary goal of maintaining price stability, and our interest rate decisions are designed to fulfil that aim. any other approach would be unthinkable. and one should never forget that price stability is a precondition for sustainable growth and job creation. question : there are some heavily indebted nations within the euro area, most prominently greece. yesterday ( tuesday, 19 april ) the news agency reuters reported that clemens fuest, who chairs the german finance ministry ’ s technical advisory committee, said greece ’ s extremely weak balance sheet meant a restructuring of the greek sovereign debt was inevitable. he said that : “ one must recognise the realities – i am expecting a haircut ”. do you agree with mr fuest and other prominent economists and policy - makers who have expressed similar views? there is an important adjustment plan which has been adopted by the greek government to reform its fiscal and structural policies. this plan has been approved by the imf, by the international community and by the european commission in liaison with the ecb. this plan is being applied. question : how worried should we be about credit rating agency s & p ’ s negative outlook for the aaa rating of us debt? is there a rising risk of higher long - term interest rates worldwide? the ecb has always thought and said that it was important for all advanced economies, without exception, in europe and the rest of the world, to be very keen on the sustainability of their long - term fiscal policies. it is extremely important that the authority of the signatures of the advanced economies is unchallengeable. i personally have full trust in the united states for preserving its creditworthiness and the authority of its signature. question : the ecb has postponed its exit from the non - standard measures on several occasions. can the non - standard measures de facto co - exist with any level of interest rates? yes, indeed, the “ separation principle ” that we apply permits us always to have the right level of interest rates, even when markets are still not