First, demonstrate the Bank’s determination to definitively overcome deflation in the form of strong and clear commitment, in order to dispel deflationary expectations that have been embedded among firms and households.
But beyond that, I do not see a strong case today for further fiscal centralisation. There are three reasons for this. First, fiscal discipline starts at home. Most citizens do not want decisions on taxing and spending to be made at the European level, at least for the time being. This means that governments have to take responsibility for delivering sound budgetary policies.