There is mounting evidence that monetary policy can reach it goals faster and with fewer side effects if it is aligned with fiscal policies. The combination of a unidirectional fiscal and monetary policy reaction to changes in economic conditions, can create an environment where both public and private investment can bolster economic recovery and support the growth potential.
And thirdly, I should note that, at least at the current juncture, the EMU’s design remains a compromise between limited risk-sharing and a large degree of individual control and hence accountability. This implies that member states will remain subject to market discipline.