Abundant Savings in the Euro Area Current account balance (% of GDP)  10,0  10,0  7,5  7,5  5,0  5,0  2,5  2,5  0,0  0,0  -2,5  -2,5  -5,0  -5,0  -7,5  -7,5  -10,0  -10,0 2001  2003 Spain  Source : Eurostat, Banque de France  2005 France  2007 Italy  2009  2011 Germany  2013  2015  Euro area  This is why we need to foster more extensive private risk-sharing in the Eurozone, which requires a more integrated financing and investment framework. As the so-called Fratzscher report on Increasing investment in Germany puts it: “the key to a sustainable recovery in Europe lies in faster growth that must be bolstered first and foremost through a joint investment and modernization campaign “. I will come to this issue. But we also need to achieve better coordination of public policies. To that effect, we need to think through the concrete role of a euro area Finance Minister could play. 4  BIS central bankers’ speeches  II. Why we need a “full coordination” institution in the euro area, embodied by a finance minister  Clearly, monetary policy cannot be a substitute for economic policy coordination or for the lack of reforms. If only for that reason central bankers need to take part in this debate, although taking action will obviously remain a decision for political leaders.
Third, there is room for an intermediate level of integration, as shown in a simple but illustrative matrix:  BIS central bankers’ speeches  5  I would call it “full coordination of national policies”, a presently missing link between integration, as we have for monetary policy decision-making, and rule-based surveillance, as it is currently the case for national fiscal policies in Europe and which is clearly lacking teeth. And I don’t think we are ready for a fully-fledged fiscal union with a common fiscal capacity and the great mutual trust it requires. In addition to the completion of banking union, the needed part of EMU reform is to set up a strong institution to fully coordinate national fiscal and structural policies. It would help to make the euro area more than the sum of its parts. Jean Monnet famously declared that “nothing is possible without men, but nothing lasts without institutions.” The idea of a Finance Minister of the Euro area is not new: Marcel Fratzscher and the DIW for instance recently advocated for “a joint finance minister”, aware that a single currency “requires an economic convergence process and close coordination of economic policy with common rules”3. But let me specify her/his concrete tasks. I see four of them. First, the Minister would be in charge of preparing the euro area-wide collective strategy to fulfill its sustainable growth mandate and collectively agreeing the division of tasks through the setting of individual performance targets for Member States.