This conflict of aims can only really be resolved if responsibility for monitoring compliance with the fiscal rules is transferred to an independent agency – a proposal that has the backing of both the Bundesbank and Finance Minister Wolfgang Schäuble.
Ladies and gentlemen As I said earlier, the only way the no bail-out principle can work at all is if the financial system really is able to cope with debt restructuring. This means ensuring that banks, in particular, have enough equity capital to be able to sustain losses from a potential debt restructuring without jeopardising their own solvency.