Public investment, and supranational investment coming from the NGEU funds, can only account for a small portion of this amount. 9  Moreover, a fundamental, game-changing feature for a more integrated capital market would be the existence of significant pan-European safe assets. A common safe asset would most likely become a common benchmark, allowing the prices of equities and bonds across the euro area to reflect fundamental risk more clearly. It would facilitate the development and integration of capital and financial markets in the euro area, as flight-to-quality movements would no longer imply flight-to-core-countries movements. This would be particularly relevant in times of stress, when it would help mitigate the possibility of monetary policy transmission being hampered in a context of fragmented bond markets. In this sense, the experience with the issuances to finance the SURE and NGEU programmes can serve as the prototype for this safe asset. Although relatively small in size, they have been a success in terms of market appetite and have helped most Member States reduce costs because of the pooled financing (see slide 9). Final reflections  As I mentioned at the beginning of my address, the fiscal-monetary policy mix has passed the demanding test posed by the COVID-19 crisis, so far, with good marks. The ad hoc decisions taken by policymakers were adequate, and compensated for the lack of a complete euro area institutional architecture, enabling monetary and fiscal policies to do their job, without overburdening each other.
Under the Maastricht Treaty, the design of EMU had two core elements: an independent common central bank targeting price stability, and a framework to coordinate national fiscal policies. The former was entrusted with monetary policy, while the latter was based on a set of fiscal rules geared towards ensuring that national fiscal policies did not endanger the price stability mandate. This meant that Member States could no longer rely on monetary policy to stabilise asymmetric economic shocks (domestic, or common with highly uneven domestic effects), while the exchange rate could not act as an adjustment mechanism between countries. Instead, they had to rely on additional adjustment channels, such as capital and labour mobility, and, especially, countercyclical fiscal policy. 1  In addition, the set of fiscal rules included in the Treaty acknowledged that the fiscal behaviour of one country would affect the rest of the members and the monetary union as a whole. In particular, unsustainable fiscal policies in one country could generate economic and financial instability across the monetary union and influence the single monetary policy. Thus, the Treaty stipulates that Member States should avoid excessive deficits, and that the European Commission should monitor public finances to identify significant deviations that could endanger the macroeconomic and financial stability of the monetary union. In practice, the Protocol operationalises these principles by means of two quantitative reference values: 60% for the ratio of government debt to GDP and 3% for the budget deficit-to-GDP ratio.