The State of the Union address : restoring confidence

Abstract

This contribution was delivered on the occasion of the EUI State of the Union in Florence on 09 May 2013This intervention was part of the recorded SoU adress that took place on 9 May 2013 available on YoutubeThis is why this year I would like to focus my intervention on how to regain condence. This is obviously a critical political issue but it goes beyond that. Condence is key for the economy. It is important for banks to be able to lend; companies to be willing to invest and consumers to be willing to spend. The crisis has certainly been a serious wake-up call for Europe. It has exposed vulnerabilities within individual Member States and weaknesses in the implementation of the rules agreed by themselves. The reality is that for too many years we fell short of drawing all the implications of sharing a common currency. For too many years we ignored some critical consequences of the Maastricht treaty. Too often some Member States have lulled themselves in a false sense of complacency. The crisis has clearly shown that we will never have an efficient monetary union without a closer economic union. Both are needed for stability. And we need stability to better resist internal or external disturbances. The crisis has amplied the urgent need for a stronger cooperation and governance at European level and bold reforms at national level. And the role of the European institutions is not simply to reform themselves but to support reform in Member States, both in the public and the private sector. This is why our response to the crisis is a comprehensive one addressing its root cause that is a dangerous combination of private imprudence, public indulgence and economic ineciency. The aim is to have a financial sector at the service of the real economy; government policies promoting competitiveness and sound public nances; and a genuine Economic Monetary Union with a fully equipped toolbox including a banking union and a strengthened social dimension.Transcript of the recorded session (video) is available in the publication ‘The State of the Union 2013 : collected perspectives’, 201