Draghi spoke on the state of the economy, the ECB's monetary policy, and the longer-term vision for economic and monetary union.
It is widely understood that our monetary union needs to be complemented by a financial union, a fiscal union, a genuine economic union and eventually a deeper political union.
The most urgent project – financial union – is taking tangible shape. The ECB is expected to become the single supervisor for a large part of the euro area’s banking sector. We stand ready to launch our internal preparations as soon as the European Parliament and the European Council reach an agreement on the legislation. The proposal for a single resolution framework is also in the pipeline. Taken together, these two reforms will re-establish confidence in the euro area’s banking sector.
It is also essential that we complete economic union by creating the conditions for each country to find its place in the open market economy that is the euro area, and to exploit its comparative advantages to generate jobs and growth. This is the meaning of a well-functioning economic union. And it will only happen if we restore competitiveness across the euro area, if we improve the functioning of product and labour markets, and if we invest in skills and innovation.
The idea of ‘mutually agreed contracts for competitiveness and growth’ or ‘reform contracts’ could be very helpful here by targeting policy actions in areas that are key to restoring competitiveness. We would also benefit from a thorough review of product and labour markets to ensure that they are compatible with the functioning of monetary union.
We have begun this year with a more stable financial environment. This has been achieved through concerted reform efforts by governments and parliaments and decisive actions by European institutions. As I said at the beginning of my remarks, all national parliaments in the euro area influence the functioning of our economic and monetary union. Spain plays a prominent role in this process.
Throughout the current phase of economic adjustment, communication between European and national policy-makers and consensus-building efforts within domestic constituencies are of critical importance. This is the best way to safeguard our future collective prosperity.
Full speech
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