The flexible exchange rate continues to act as a shock absorber, where the currency is allowed to strengthen if it is not deemed overvalued relative to the fundamentals or to weaken if it is not deemed undervalued.
The ECB’s role is not to police fiscal and structural policies. It’s up to governments to do it with impetus from the Commission. The progress necessary for Economic and Monetary Union We must also continue working to strengthen Economic and Monetary Union in order to increase its resilience to economic shocks.