Ultimately, the reforms were enacted, just as the then-vice president of the ECB predicted. But I believe it is fair to conclude that greater integration was a de facto prerequisite for the proper functioning of the euro, rather than a consequence of it. It was the crisis that made a compelling case for a common and reinforced banking supervision and resolution framework that would help break the bank-sovereign risk feedback loop.2 On one hand, in a context of banking crisis, the combination of State support to national banking systems and lower tax revenue exert pressure on public finances, impairing a country’s solvency. On the other, banks’ high exposure to their country’s sovereign debt compromises their own solvency, which may increase recapitalisation requirements. Memory can sometimes fail us, which is why I would like to stress the scale of that crisis. Offering some figures, Greece’s sovereign debt spread over the related benchmark was more than 1500 basis points in June 2011, while those of Portugal and Ireland were around 700 bp. As you know, the crisis hit Spain head on a year later in July 2012, with the market demanding more than 7% to finance us at 10 years.
The award of the Nobel Peace Prize to the European Union in 2012 for having “over six decades contributed to the advancement of peace and reconciliation, democracy and human rights in Europe” attested to the success in achieving this original goal. I believe that the goals of ensuring peace and promoting integration and economic development are in fact related. As the World Trade Organization rightly reminded us, the trade war unleashed during the Great Depression contributed to the outbreak of the Second World War. In this respect, one very positive consequence of trade between nations is that it contributes to transforming “rival” nations into partners, who share interests instead of having conflicting interests. Undoubtedly, since the foundation of the European Coal and Steel Community in 1952, economic and political integration in the EU has attained a most notable level. However, the process has been neither linear nor gradual. Over almost 7 decades of history, the European project has witnessed long periods of calm – where little or nothing remarkable happened – punctuated by “transformative periods” that have contributed decisively to its development and to shaping its current form. Normally, these deep transformations have stemmed from processes involving reflection and negotiations, conducted in a more or less orderly fashion. 3/10  Introduction of the single market and the euro For example, the start-up of the single market was the outcome of lengthy negotiations that began officially in 1985.