This pillar is essential for engaging euro area citizens more deeply and making the other three pillars legitimate. Some observers argue that because of the common decision-making implied by the other three pillars, political union has to come first. I do not agree. Political integration can and will develop in parallel with economic integration.
Our focus is threefold: detecting impairments to the transmission mechanism, such as fragmentation risk, monitoring a possible build-up of financial imbalances, and identifying how far macroprudential policy addresses financial imbalances.