In addition, policy-makers should be increasingly aware of the importance of overcoming fragmentation in European capital markets and of achieving a single market for capital. Identifying the problem As regards the link between finance and growth, for a long time, it was common to say that finance affects growth in a positive, monotonic way, as if more is always better.
And the addition of the single currency to the single market was expected to lead to a rapid narrowing of differences between richer and poorer members. But the reality was of course different, and convergence was slower than we thought – at least sustainable convergence that did not unwind with the bust.