Again, this is a global phenomenon but in my view it is also linked to the unique institutional architecture that sets the euro area apart from other constituencies.11 It relates to the question of how monetary and fiscal policies can optimally interact and reinforce each other in an environment in which policy space is significantly smaller today than it was before the crisis.
Our response to such concerns should not be to challenge our institutional arrangements. It should not be about blurring the lines between monetary and fiscal policies. Central bank independence, which has clear and indisputable benefits, is a public good that needs protection. Instead, our response should be about strengthening complementarities.