He also stressed that this crisis has been a failure of government as well. Governments were guilty of a systematic failure to supervise the financial sector rigorously or regulate property markets effectively. Fiscal policy was often too loose and sometimes reckless. There were too few reforms to get economies ready for the next inevitable phase. There was insufficient policy coordination among national authorities, and for that the European Union must also take some collective responsibility.
 

He presented the following two points specifically on the euro area:

• First, on the financial assistance given to the euro area countries in distress. The programmes, and the conditions attached to them, are agreed before the assistance is granted. This was the case, for example, with Portugal in the Eurogroup and ECOFIN of this week. He emphasised that for the Member State undertaking such a programme, its implementation is necessarily painful. It implies the correction of deep-rooted imbalances, in many cases associated with vested interests. But if properly implemented, the country will be better off. Results will not be immediately visible but they will be there. We need time, we need to persevere. Consistency is a fundamental principle of any policy, and a fortiori of economic or financial policy.

• Securing sustainable growth in the euro area is a matter of common concern. Member States under severe adjustment programmes will grow at a slower rate for a while. But, the more others grow, the swifter will be their adjustment. The global response of the euro area to the debt crisis must include both adjustment and growth.

Full speech