Financial integration has facilitated the consolidation of financial structures, thereby increasing crossborder corporate linkages. In recent years, large flows of foreign direct investment among euro area countries have exemplified this intensification of corporate linkages. The second key success of the euro relates to the convergence of long-term market interest rates towards those of the best performers in terms of credibility and low interest rates.
In most countries, including Italy, this convergence has meant significantly reduced financing costs, thereby providing an environment favourable to growth and employment. Thanks to the stability oriented macroeconomic policy framework, focusing on price stability and on sound fiscal policies, - that is the two missing elements of the Latin Monetary Union - risk premia have declined and inflation expectations have stabilized at low levels.