•  A strong Europe is all the more necessary in a multipolar world, as a “balancing power.” By 2050, the divide will no longer be between emerging and advanced economies, but rather between who was prepared and who wasn’t. Ideas to enhance European economic governance are not new. Mobilization and implementation have proved tricky however: this is what I would like to focus my remarks on speaking of the motivations (I) and then of the concrete tasks of a Euro area Finance Minister (II). I. Why we need a “full coordination” institution in the Euro area  We know there is deep political resistance to sharing fiscal resources and sovereignty, as well as Euroscepticism. The sad example of the refugee crisis illustrates how European countries so far have displayed little solidarity to find a common solution. This is why we need to make the economic case for a stronger governance of the euro area: it is not a theological issue and not solely a political one either. This discussion is not about “more Brussels”, it is very concretely about more growth and jobs in Europe. Clearly, monetary policy cannot be a substitute for economic policy coordination or the lack of reforms. For that reason alone central bankers need to take part in this debate, while taking action will obviously be a decision for political leaders. This is also why our focus should be on the Eurozone economic governance. We should not fear different speeds in Europe.
Similarly, an economic slowdown cum banking crisis has severe effects on output and employment. But today we need not resort to those stories. The US has been accumulating a current-account deficit for quite some time that sooner or later would have to be corrected via deceleration and depreciation. But the financial crises that got in the picture will make adjustments much more expensive. BIS Review 124/2008  1  Global imbalances By the late 1990s, the US current account deficit began to soar: From 140 billion dollars in 1997 – equivalent to 1.7% of GDP – it climbed to 739 billion dollars in 2007, that is, 5.3% of GDP (figure 1). A first glance at the data requires screening the regional savings and investment balances to see how current-account deficits are distributed around the world. What we see is a dramatic fall in savings – both private and public – in the United States, but also a major increase in surpluses in Asia. This reflects increased savings in China, but also a post-crisis dramatic reduction in investment in the rest of Asia. 1 The recession of 2001 brought a slight relapse, but growth resumed briefly. Fiscal policy was of little help, although the fact that the international interest rate was so low – as opposed to the mid-1980s' twin deficits experience – is an indication that the cause of the deficit was not the drop in US saving , but rather Asia’s surplus.