The ECB has to be sure that the distinct national requirements are met before it issues, for example, a “failing or likely to fail” verdict. For a “single” supervisor this is a far-from-ideal situation. These few words of caution have all the more weight and relevance as we have had a very successful first year of European supervision.
Beginning in the late 1980s, impressive progress was made in reining in federal expenditures and restoring a better balance between spending and revenues. The lower federal deficits and, for a time, the realization of surpluses contributed significantly to improved national saving and thereby put downward pressure on real interest rates.