However important, they should not obscure what should be governments’ urgent priority: strengthening the first two lines of defence of our monetary union. Achieving lasting economic stability must involve finding a balance of discipline and flexibility in our economies. This will both strengthen support for the euro and help alleviate the pressure and burden on the ECB in crisis times.
Co-ordination of labour market policies ensures a continuous BIS Review 86/1997  -5dialogue and exchange of information on policies embarked upon by the Member States. Indeed, policy co-ordination may lead to peer pressure, reinforcing labour market reforms. The latter are of crucial importance for the functioning of EMU.