And a crucial facilitator of sustained growth is credit – flows of funds from people who are saving to people who are investing. Credit provides households and businesses with the ability to borrow on the back of future expected income to finance large outlays, for example, the purchase of a home or equipment to establish or grow a business.
Strengthening of the fiscal rulebook and the introduction of the European Stability Mechanism were big steps towards further EMU integration. However, in a semi-permanent mode of crisis-management, policy makers had little to no time to involve their constituencies. The magnitude of the euro area debt crisis was amplified by the fact that channels through which macroeconomic stabilization could take place, were insufficiently developed.