over the last two months. for the second operation, we decided to have an expanded collateral pool, so that smaller banks – which tend to lend to smaller businesses that are crucial for the european economic activity – could benefit more. the ltros were specifically designed to help the banking system overcome the dilemma it is facing. the idea was to remove the funding pressures, thereby allowing a smoother deleveraging process ; while at the same time preventing a major credit crunch that could compromise the maintenance of price stability in the euro area. at this stage, positive effects from these operations have already materialized. it is clear that banks were facing major funding uncertainties in 2012 and 2013 : these funding pressures have now been removed. this could in turn contribute to the issuance of new shares and hence to the meeting of the capital requirements without forcing excessive deleveraging. a reduction in counterparty risk is visible through lower bor - ois spreads and banks ’ cds spreads have significantly narrowed as well. it is too early to assess the extent to which these measures will “ trickle down ” to the financing of the real economy, but the fact that more banks participated in the second operation ( 800 compared to around 500 ) indicates that the money is now closer to small and medium - sized enterprises than it was before. 2. 3 the challenge for the eu institutions : enforcing economic union the weakness of european economic union in the context of monetary union contributed to the development of the current crisis and, if we are to emerge from it stronger, real improvement is required in this area. european governments have fully understood this issue and have made concrete and significant progress towards a more integrated economic union. on the one hand, europe has considerably enhanced its fiscal discipline framework. the legislative package ( the so - called “ six pack ” ) entered into force in december and considerably reinforces the stability and growth pact : the surveillance powers of the european commission over national budgets have been enhanced, sanctions have become quasi - automatic, the criteria for public debt and public spending are being more closely scrutinised and a new framework for the surveillance of macroeconomic imbalances and competitiveness developments has been put in place. in addition, 25 european heads of state or government signed the treaty on stability, coordination and governance which establishes a comprehensive new “ fiscal compact ”. it includes in particular a requirement for national budgets to be in balance or in surplus, a criterion that will be met if the annual structural government deficit does not exceed 0. 5 % of

integration so that we europeans take our destiny into our own hands, as chancellor merkel rightly said in munich last spring. in my remarks today, i will explore three economic concentric circles : first the economic union, by presenting the accelerators that are needed to make concrete progress ; second the financing union, by focusing on one of these accelerators, which might be of particular interest to your community of banks and financial institutions ; and third the banking union, which is a key part of the financing union and which has to be completed. it is now time to act in europe : four accelerators of the economic union in rome, on 25 march of this year, the member states all expressed their clear willingness to work “ towards completing the economic and monetary union ". we are in agreement on the “ why ". let me say one word about our monetary policy. taking into account our progress, the governing council decided at the end of october to pursue a gradual normalisation. we will clearly follow this path of gradual normalisation, with caution but combining the whole range of our instruments – and there shouldn ’ t be excessive focus on the net purchases of assets. but monetary policy cannot be the only game in town, and therefore we should not overburden it. furthermore we aim at greater stability, to counter the risk of a new crisis befalling an unprotected euro area, with all its damaging political and economic repercussions ; and greater growth, to catch up our past lag on the united states and finally treat the fatal disease of mass unemployment in europe. 1 / 5 bis central bankers'speeches with this objective in mind, how, concretely, can we make progress on economic union? in my view, we should trigger four accelerators : a macro accelerator, which would consist of a collective economic strategy shared by all euro area member states ; a micro accelerator, which would take the form of a financing union for investment and innovation, going beyond the capital markets union ; a fiscal accelerator, which would draw on a euro area budget. the fourth is not an accelerator in substance, but rather a “ facilitator ” for the first three : in terms of institutions, we would need a euro area finance minister and parliament. these four accelerators are needed, but this does not mean they all have to be implemented at the same time. with the existing treaty, we can take steps straight away on the first two accelerators, macro and micro, on