We need to convince our employees of the merits of our strategy and make the case to the public of the importance of price stability; target-based management and confidence in the euro are additional areas where we must win over support – and I am sure that you could continue this list with any number of examples from your authorities.
As has long been recognised, going back to the literature on optimal currency areas8, there is also an important interaction in a monetary union between fiscal and structural policies at the national level. If an economy has resilient product and labour markets and adjusts more quickly to shocks, there is less need for expansionary fiscal policies.