Likewise, further headway would be needed in reducing sovereign-banking links, which contributed notably, as is known, to heightening the severity of the crisis in the euro area. In this connection, the banking union requires supranational support that would increase the financial capacity of the Single Resolution Fund in the event of a systemic crisis and which would afford it greater power during the transition process established for its full constitution. The European Commission’s proposal that the European Stability Mechanism should provide this support might be an appropriate solution. It is also necessary to create a common deposit guarantee scheme whereby depositors’ confidence in banks is irrespective of the health of their Public Treasuries. Progress on the set of initiatives encompassing the Capital Markets Union would also contribute to achieving greater financial integration, diversifying sources of financing and empowering to a greater extent private mechanisms geared to sharing the risks that originate through these markets. Conclusions In any event, it should be stressed that, although the recovery is providing for the correction of some imbalances, some fallout from the crisis remains at large. The high levels of unemployment and of public and private debt, low productivity growth and the weakness of the capitalisation process pose challenges that require greater reformminded ambition.
Dimitar Bogov: When pressures on prices are relieved, we will stimulate economic growth Interview with Mr Dimitar Bogov, Governor of the National Bank of the Republic of Macedonia, in “Kapital” weekly magazine, published on 8 November 2012. *  *  *  Bank affairs are always possible In the countries in the region banking affairs have erupted, in connection with criminal activities of some banks in conjunction with politicians. What is the situation in Macedonia? Is everything under control in the banking sector? NBRM controls the banks in terms of their compliance with the regulations, the quality of corporate governance, and assesses the risks that banks undertake in their operations. Banking supervision is a strong prevention against criminal operation. But that does not mean that as anywhere in the world, banking affairs could not take place also in the banking sector in Macedonia. Spasijka Jovanova The National Bank of the Republic of Macedonia lowered the forecasts for the economic growth this year to 1 percent and raised the concerns of inflation. The condition when no growth is registered, i.e. there is a downturn, and there is higher inflation, is called stagflation, which is the worst stage of an economic crisis. Is the Macedonian economy in such a stage? I would not agree that the Macedonian economy is entering stagflation. However, there were unusual movements in the world economy.