Constâncio stressed that it is essential to put in place a framework of economic governance and a set of policies to prevent a recurrence of the crisis. There is evidence of significant progress having been made in recent months in this area.
Speaking at the ’The ECB and its Watchers’ conference in Frankfurt, ECB Vice-President Vítor Constâncio said that the EU is now experiencing the full effects of the imbalances - both public and private sector - that have accumulated in Euro area countries over past years.
He highlighted that the Euro area now faces two key challenges:
· The first is to take the necessary and difficult measures to restore fiscal positions and eliminate private sector imbalances. So far, this challenge seems to have been met. This can be seen, for example, in the decisive fiscal adjustment measures that have been adopted in the countries concerned and in the rapid adjustment of the private sector to the changed environment. It is essential to maintain the momentum and to restore sound and sustainable financial positions in both the private and the public sector.
· The second challenge is to make sure that the lessons learned from this experience are well understood. A framework of economic governance and a set of policies to prevent a recurrence should be put in place. Here too, there is evidence of significant progress having been made in recent months.
’Some commentators argue that the imbalances that we have seen in the Euro area have seriously weakened Monetary Union, even posing a threat to its survival. I think that the opposite will turn out to be true. When both challenges are met, the result will be a euro area that will be far more robust, with a more resilient financial system, and with sounder fiscal positions and a more balanced development across countries’, he concluded.
© ECB - European Central Bank
Key
Hover over the blue highlighted
text to view the acronym meaning
Hover
over these icons for more information
Comments:
No Comments for this Article