de portugal ’ s participation in the european system of central banks ( escb ) and the legal committee ( known as legco ), which has played a crucial role in developing the emu. on 7 july 1998, the ecb approved the rules of procedure, which laid down the establishment of escb committees – composed of representatives of the ecb and of the national central bank of each participating member state – to assist in the work of the escb. the legal committee is one such committee. the committees established under this regulation assist in the work of the decision - making bodies of the ecb, specifically the executive board and the governing council and are composed of representatives of each of the national central banks and the ecb. different committees have different compositions, depending on whether matters fall within the field of competence of the eurosystem, the escb or – since 2014 – the single supervisory mechanism. 1 / 4 bis central bankers'speeches the establishment of these committees was the expression of a true conceptual system that was behind the preparatory work conducted on the monetary pillar during stage three of emu. this committee structure – different from the technical committee procedure present in other european decision - making bodies – invokes the idea of a participatory decision - making process which benefits from the sharing of experience and know - how among national central banks, under the aegis of the ecb. the ecb ’ s legal committee is a genuine example of the identity of the eurosystem and the escb. taking over from the working group of legal experts, which operated under the emi, legco is a committee with privileged insight due to its cross - cutting nature, whose assistance is invariably requested by all other eurosystem committees, the executive board and the governing council of the ecb. this is also the reason why, 20 years after its creation, it is no exaggeration to say that this committee acts as a repository that is a vital tool to understand and interpret developments in the eurosystem and the escb, and will certainly be called upon during the implementation of potential reforms. 2. regardless of one ’ s opinion on the merits of the european monetary union, the creation of the ecb was a major historical landmark – which had a significant effect on europe and each of its countries and a profound impact on international monetary relations and consequently on the economy and international politics. several generations of banco de portugal employees have participated in the construction of emu at different times : first,

ago, “ it is abnormal that the supervision responsibility is collective but the consequences, if something goes wrong, go back to the national authorities. ” 4. as can be seen in the revealing title of professor jean - victor louis ’ address, reforming the emu and the european banking union is a very difficult task. i would add that it is as difficult as it is necessary, given that the changes that have been introduced so far – although generally positive – are not enough to ensure the long - term sustainability of the emu and to guarantee the financial stability of both the union and the countries that belong to it. there is no time to lose. we have the duty to prevent the next crisis from finding us in the current situation, only halfway there and possibly having already exhausted a number of tools. the debate has long been underway and there is a need to refocus it around what really matters, overcoming non - existent issues that only lead to paralysis. indeed, as professor jean - victor louis clearly demonstrated, in a view shared by many, establishing a relationship of priority between reducing and sharing risks is a true argumentational fallacy on a number of levels. the main challenges are known : to complete the banking union ; to incorporate the european stability mechanism into european law ( overcoming its intergovernmental character ) ; to find a way of providing the emu with a ‘ fiscal capacity ’ ; and to create a capital markets union are crucial steps to enhancing the stability of the emu. divergences have been listed and possible paths have been identified. now we must have the courage to make decisions. but we must also be aware of the divisions between and within member states and, for this reason, we must be realistic. what i mean by realism is having the ability to implement solutions which will effectively address the problems that have been identified in the functioning of the emu, but in a spirit of compromise and mutual understanding. the worst thing we could do would be to pretend we are reforming the emu while leaving key issues with no prospect of a solution. notwithstanding the gradual approach that has historically characterised the union, we must take concrete steps to solve the imbalances that exist within the union. if we don ’ t, the emu might even be jeopardised eventually. the emu is not an end in itself. it was designed to contribute to improving the lives of eu citizens and to strengthen the role of the european union – and consequently of each eu member state