Policy implications Given the interdependencies across the Mediterranean countries that I have just described and the ongoing integration with the euro area, it is natural to ask: how should policies be designed in order to promote sustainable capital flows in the Mediterranean area?
The issue of how to deal with undesired spillovers from policies conducted in the euro area and in the US remains a controversial one. I would like to use the remainder of my time to discuss this question from three perspectives: that of the country (or area) generating the spillover effects (‘originating country’), that of the country impacted and, finally, the multilateral approach.