The first strand is necessary to prevent and correct imbalances; the second to ensure the conditions for future growth and competitiveness; the third to provide a last resort backstop if crises still occur, the fourth to guarantee financial stability, in particular in the banking sector.
That said, prevention and correction of fiscal and macroeconomic imbalances must be given priority as it is the pre-condition for sustainable economic growth and financial stability. As the ECB has stressed on a number of occasions, here a “quantum leap” forward is needed in strengthening the Stability and Growth Pact and creating an effective new framework for surveillance of macroeconomic imbalances.