And to ensure that the financial system is prepared to deal with external or internal shocks. This is one of the main preconditions for sustainable economic growth that I have already mentioned. It’s because the financial system is like the blood circulatory system of the state: if it malfunctions, it causes problems for other parts of the body of the state.
A credible monetary policy anchors inflation expectations and increases market transparency, thereby facilitating the necessary adjustment of relative prices across different countries or sectors in the presence of economic shocks. In addition to the positive effects of monetary stability, a single currency enhances the processes of financial and trade integration within the euro area.