TRICHET: The quantum leap we are asking for in surveillance of fiscal policy has to be the equivalent, in our own institutional framework, of what a federation could do. And we should not overestimate labor mobility in the U.S. and underestimate it in Europe. If I take the U.S. state with the highest unemployment and the state with the lowest, I am not that far from what we observe in the euro area, for instance in 2009 between 18% and Spain, 3,7 % in Netherlands, and between 13,6 % in Michigan, and 4,3 % in North Dakota, 4.3%. WSJ: Should senior bondholders of bank debt be forced to accept haircuts in the event of a bailout, as proposed by the European Commission? TRICHET: This is not a European concept. This is a global concept, which is discussed in particular at the level of the Financial Stability Board and of the Basel Committee It is particularly important for so-called systemic financial institutions. Very careful analysis is  BIS central bankers’ speeches  3  required on the various possible options – additional capital buffers, contingent capital, bailing in financial instruments, etc. I would say for us it is still a work in progress. In any case I don’t imagine we could have a different solution in Europe than in other advanced economies. WSJ: What can be done to improve the euro zone’s growth potential?
Within a few weeks, Spain will be holding general elections, which should be cause for a far-reaching debate on these challenges. A minimum consensus should ultimately emerge on the policies best suited to tackling them, thus ensuring that such policies are durable (a key factor if they are to be successful). Our ability to secure lasting improvements to the well-being of the general public and real convergence with our European partners will largely depend on this. 26  Stuhler, Grébol and Machelet are the joint authors of the forthcoming paper Educational Mobility in Spain. 27  Grébol, Machelett, Stuhler and Villanueva (2023). 28  This statistical relationship has been called “The Great Gatsby Curve”. Corak (2013). 9