Europe must remain an anchor of stability in a world that appears ever more unstable and politically unpredictable. The introduction of a safe asset in the euro area is a clear and immediate objective. It is a technical endeavour, but it is also the common denominator to the three unions (banking, capital markets, fiscal) that must flank monetary union.
Exchange rate dynamics have significant effects on the ultimate goal of price stability and hence on monetary policy decisions. •  The impact effects of external vulnerabilities on the domestic economy are channelled through three main sources – first, with a commodity-dependent export base, the economy is highly vulnerable to negative terms of trade shocks.