Fiscal policy Fiscal policy is the second pillar on which a successful monetary union rests. Fiscal policy is crucial for both economic convergence, and perhaps even more importantly, for the credibility and sustainability of the Monetary Union. Fiscal policy matters for economic convergence because it affects aggregate demand and interest rates.
However, I have already exceeded the number of issues than can be conveniently addressed in ten minutes. Let me conclude by noting that the recent market developments have not only revealed weaknesses and challenges to be addressed, but also the strength of some of the institutional arrangements in place.