In this sense, political union is not about moving forward, but about catching up with the depth of economic and financial integration that already exists. What is at stake refers basically to democratic accountability and legitimacy. An important element of legitimacy has been provided in the past, in the European Union and other democracies, by what Fritz Scharpf called output legitimacy (or government for the people), 11 that is, by the effectiveness of the system in ensuring the continuous improvement of the citizens´ quality of life. All advanced democratic countries and consequently the European Union will face challenges in this front stemming from the prolonged period of slow economic growth that has now just started. This is the consequence of two types of processes. First, the adjustment to the form of balance-sheet recession that the crisis represented and the workings of mechanisms of the associated debt deflation. Second, by the structural problems created by ageing populations, globalisation, energy and environmental risks and decreasing returns of technological progress recently underlined by Robert Gordon. 12 To strengthen output legitimacy, the Euro Area has to improve the effectiveness of its decision-making institutions to overcome the present situation of crisis. The decisions and reforms I have highlighted in this talk have precisely that objective. The transfer of some functions to the European level is necessary as I argued here. We should not hide, however, the difficulty in explaining these reforms to the European public opinion to get their support in the present environment.
For Sweden there is also membership of the European Union and possibly of EMU. ·  Analytical requirements are heightened in general. Matters are becoming increasingly complex. Another factor here is the new technologies with electronic payment systems, for example. ·  In our case there is also the crisis in the early 1990s and the lessons we have tried to learn from it. I shall now say something about the work we have done in recent years in three respects: Concentrating on cores activities; Strength and security; and Management with an executive board. BIS Review51/2001  1  Concentrating on core activities A good performance presupposes that we concentrate our resources to what is really important. The starting-point here is, of course, our main statutory functions, namely to maintain price stability and promote a safe and efficient payment system. For three hundred years the Riksbank has owned a paper mill and a note-printing works in Tumba and a mint in Eskilstuna. These are largely manufacturing operations. Through the Tumba works, in the past decade the Riksbank has been active in export markets and produced banknotes on behalf of a number of countries. Besides manufacturing notes and coins, we distribute them. Like McDonalds and the food chains, we send our products, wrapped in plastic though not deep-frozen, to everywhere in Sweden. In our case the security requirements are, of course, considerably higher. But is this really something we should be doing? At the Riksbank we decided it was not.