If the NAIRU is reduced, a higher level of employment and a lower rate of unemployment can be supported by monetary policy without creating inflationary pressures. Some eurozone politicians suggest that the eurozone or eurogroup could form the basis for enhanced cooperation within the European Union. If the eurozone does not develop a political character, can it survive over the longer term?
There are suggestions that may be potentially useful but I have not seen precise proposals that specify the framework and mechanisms for achieving enhanced cooperation in practice. As a central banker I feel that it would not be appropriate to comment on means of enhancing political integration in the euro area.