During this morning’s address, ECB President Mario Draghi reminisces about the origin of the euro currency. And how it did solve some of the challenges, the current crisis has exposed other for with the single currency is not enough.
Tommaso Padoa-Schioppa’s tenure at the Banca d’Italia and at the European Commission was punctuated by realignments in the exchange rate mechanism of the European Monetary System. He famously pointed out the key problem of the “inconsistent quartet” – fixed exchange rates, free trade, capital mobility and national monetary policies.
The single currency was identified as the solution.
Today, we see that this solution was incomplete. The crisis has exposed the need to complete economic and monetary union.
In my joint work with the Presidents of the European Council, the European Commission and the Eurogroup, we have identified four pillars on which to build a stable and prosperous Europe: a banking union with a single supervisor; a fiscal union that can effectively prevent and correct unsustainable budgets; an economic union that can guarantee sufficient competitiveness to sustain high employment; and a political union that can deeply engage euro area citizens.
For the full statement visit the ECB website
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