A surplus of more than 3 % of GDP, for an economic area which still has a negative output gap of more than 2%, is clearly suboptimal. In sum, all these figures point to a significant cost of non-coordination, of at least 2% of the EA GDP at present. C.  To take the debate forward, three principled choices have to be made. These principled choices are needed: (i) to resolve the debate between coordination and reforms; (ii) to simplify rules and embrace institution-based policymaking; in order (iii) to achieve full coordination. First, we do not have to choose between coordinating economic policies and domestic reforms. This is the cornerstone of any French-German agreement: breaking the political gridlock on coordination versus reforms, and making parallel progress on both domestic reforms and European coordination. This requires overcoming distrust and putting both aspects under the same umbrella, namely a common institution. Second, institutions with a mandate are superior to rules without institutions. To bolster policy consistency and coordination, we admittedly need simpler rules. For instance, the complexity of the reforms of the Stability and Growth Pact (SGP) and the so-called “Fiscal Compact” is such that Finance ministers privately admit they do not know whether their country is completely abiding by the rules. But we learnt in real life that we cannot rely simply on rules. They should be supported by strong institutions with discretionary powers.
Besides the obvious economic crimes such as drug trafficking and corruption, governments also need to fight against economic and financial crimes in every other shape and form. Any type of such crimes can generate feelings of resentment about an unfair society, not just the drug trafficking cases. Stock price manipulation, insider trading, or tax evasion, which even though do not directly harm people's lives, can still make people feel slighted. This is especially so if these white-collar perpetrators are quite influential or are close friends with politicians or the administrations. In all these cases, the role model set by the government is the most important element in winning people's confidence that the government is truly and sincerely committed to fighting against economic and financial crimes. If the perpetrators are members of the government, swift and decisive actions taken against them will make society confident in the government's policy on this issue and thus encourage law enforcement officers to fearlessly do the right things. What I have been talking about so far concerns economic crimes within a country. Things get more complicated and much more difficult to combat when it comes to cross-border economic crimes. These require close cooperation of law enforcement authorities in every country. Today's United Nations Congress on Crime Prevention and Criminal Justice is a good example of the collaboration effort at the international level. To combat transnational crime, the willingness to collaborate is strong when authorities hold the same view on such crimes.