The second package of measures concern what can be done collectively by euro area countries to strengthen the foundations of our single currency. An improved governance structure is needed to rule out the possibility of the euro area gradually sliding into a regime of fiscal or financial dominance.
Or even worse, a combination of the two if we don’t find a clear solution to the infamous sovereign-bank nexus. We must consistently guard against such developments. The priority must therefore be to complete the banking union and to establish the capital markets union, as well as regulatory clarity on how to avoid excessive risk concentration on banks’ balance sheets.