My second conclusion is that reforms that aim to improve the quality of institutions can help unlock the productive potential of our economies and can provide the basis for a renewed process of real economic convergence – a process that would not only strengthen social cohesion but also the belief in the benefits of our currency union.
This is a vitally important goal in and of itself. In addition, by promoting flexibility and overall living standards in the euro area, improving and harmonising the quality of our institutions also increases countries’ ability to cope with adverse shocks, thereby easing the conduct of monetary policy.