One additional dimension of policy coordination in the euro area is that between the single monetary policy and the national fiscal policies of the Member States. In this respect, the institutional set-up of European Monetary Union consists of a clear and efficient assignment of objectives and instruments to the different authorities, together with a strict division of responsibilities.
The ECB must focus on its primary mandate of delivering medium-term price stability under conditions of full independence. Fiscal policy must focus on its traditional objectives related to allocation, redistribution and stabilisation (to varying extents), while contributing to maintaining an environment of macroeconomic stability.