By contrast, responsibilities for fiscal policy, economic policies and supervision remained located at national level, while being subject to common rules and procedures. In the end this arrangement has proved insufficient in preventing the build-up of financial and economic imbalances in the euro area, associated with divergence in competitiveness as well as unsustainable trends in public and private debt and associated banking crises.
For this reason last year the Van Rompuy report by the four presidents put forward the case for complementing and completing monetary union with further “four unions” to ensure that all relevant policy areas fully live up to the common responsibility that sharing a common currency implies.