benoit cœure : time for a new lamfalussy moment speech by mr benoit cœure, member of the executive board of the european central bank, at the professor lamfalussy commemorative conference, budapest, 1 february 2016. * * * i would like to thank lucas guttenberg for his assistance in preparing this speech. all views expressed herein remain mine. summary recalling the crucial contribution of alexandre lamfalussy to european integration, benoit cœure calls for a new method to accelerate this process at a commemorative conference in budapest today. the fact that europe is facing so many challenges should not discourage member states from integrating further. on the contrary, says benoit cœure, countries sharing the euro should show they are able to go forward in a unified manner. a successful euro area is crucial for a successful european union. a strong political commitment to complete the economic and monetary union ( emu ) is also needed to strengthen the recovery and spur investment. it will show the public, business and markets that we are serious about make the euro a success. in the end, there will be no sustainable economic convergence without a political convergence, which implies a common understanding of what economic and fiscal policies look like in a monetary union. this is a root cause of why the spirit of the common rules is not sufficiently implemented. the moment has come to structure the process of integration in a new manner. this means putting the debate on european integration back where it belongs – in the political arena. dear governor matolcsy, ladies and gentlemen, almost to the day 15 years ago, on 15 february 2001, alexandre lamfalussy and his committee of wise men submitted their final report on the regulation of european securities markets to the commission. 1 to deepen integration in the union ’ s financial markets, they proposed to distinguish between the political choices and the more technical measures in the area of financial legislation ; the former would be made by the legislators themselves, while the latter would be left to technical bodies. the intention was to significantly streamline the legislative process in order to ensure that the union ’ s legal framework for financial services was keeping up with the rapidly changing realities on the ground. the offspring of the lamfalussy report is today ’ s european system of financial supervision, comprising the eba, esma, eiopa and esrb. lamfalussy and his colleagues had realised that there are moments when one has to shift gears and change the method in order to progress

, three ingredients could make a difference here : first, more flexible economies to ensure that adjustments can take place via market mechanisms. 5 this means making the most of a low - interest rate environment to embark on structural reforms. these will not only increase growth tomorrow by boosting productivity and employment, but also will send a signal of confidence and unleash investment opportunities today. 6 which leads me to the second ingredient : higher levels of investment. since the beginning of the crisis, investment has shrunk markedly. of course, we should be careful not to assume that investment levels right before the crisis were desirable, as they partly reflected exuberant behaviour. but despite the current low interest rate environment, we are still well below the average numbers for the period 1995 - 2005 for both public investment and private investment. 7 this shows that an essential ingredient for sustaining the recovery is still missing. and third, which brings me back to my call for a lamfalussy moment, a strong political commitment to complete economic and monetary union so as to give the public, businesses and markets a strong signal that we are serious about making the euro a lasting success. given that today ’ s conference is in honour of alexandre lamfalussy, i ’ ll focus the rest of my comments on that last point – completing emu. the five presidents ’ report, which was published last summer, provides a very useful roadmap for moving ahead. however, discussions in recent months have shown that not everyone agrees on the need to complete emu. nevertheless, in my view we might be able to agree, for a start, on three principles that could guide future work towards a complete economic and monetary union and that strongly reinforce the proposals made in the report. these principles are as follows : risk sharing and risk reduction – a parallel approach first, risk sharing and risk reduction should go hand in hand – both as regards strengthening the banking union and as regards economic and fiscal policies. think of it as being like building a house. of course you will want to take all the necessary precautions to prevent fires, and you will want your neighbours to do the same. but even with the best precautions, you will probably still want to buy fire insurance, and rightly so. and if you buy it together with all your neighbours, it will be much cheaper. see cœure, b., “ rebalancing in the euro area : are we nearly there yet? ”, speech at danish economic society in ko