• Regarding monetary policy instruments, asset purchase programs are not “over-the-counter” in emerging markets; policy makers need to be mindful that central bank financing to governments can fall into a situation of fiscal dominance. • Stress tests of fiscal sustainability and availability of sources of finance are needed to avoid situations that could lead to financial repression or monetization of fiscal deficits.
Let me then also offer our assessment of the challenges that lie ahead and that will await the new Parliament and the new Commission. Before I start to go into detail in these three areas, let me however remind you that the next meeting of the ECB Governing Council takes place on Thursday.