We need to speed up the transition to a uniform system of financial sector rules and oversight. This should be accompanied by common guarantee and insurance mechanisms that can reassure savers and investors and prevent flights of capital. Rapid progress in setting up a European fund for the resolution of banking crises would help to dispel uncertainty. 8.
Second, consolidation measures were implemented in a number of euro-area countries to restore the markets’ confidence in fiscal sustainability. To varying degree these interventions were accompanied by structural reforms to increase potential growth and avert a downward spiral of deeper recession and deteriorating public finances. In the case of Italy, action on the public budget has been rapid and decisive.