Such an instrument already exists, in theory, in the ESM toolbox in the form of the ‘Precautionary Financial Assistance’. Yet, it has never been used, and could probably be improved, with clear rules and some form of automatic prequalification system, to avoid a stigma effect. This enhancement of the crisis prevention instruments could form part of a broader transformation of the ESM and its governance into a European Monetary Fund (EMF). The issue of allocation should also be seriously addressed. In order to boost potential growth in the long term, expenditure on investment and on our future are vital, including on education and training and, of course, new technologies. This is true of national budgets, but we could amplify the effect through a euro area investment budget. This budget could be used to finance, for the benefit of all euro area Member States, certain “common goods” such as digital technology, energy transition, security, and external border protection. As all countries would benefit from this budget, it would be precisely the opposite of a transfer union. In a nutshell, what I have elaborated on so far are the accelerators of the Economic Union: micro, macro and fiscal [slide]. 3/ This leads me to the third and last cliché: we should stop pitting risk reduction against risk sharing or, to put it another way, responsibility against solidarity or, in a complementary perspective, rules against discretion. These oppositions create a sterile division between northern Europe and southern Europe.
We as central bankers are concerned here with avoiding overburdening monetary policy by the next recession, but it is of course the responsibility of politicians to act. 1/ The first cliché that emerges when we talk about reforming the euro area is the opposition between vision – be it French or otherwise – and pragmatism – seen as a northern European virtue. We must be practical, and take real needs and particularly those of businesses and entrepreneurs as our starting point. At the same time, we need a political ambition if we are to act – call it a “vision” if you wish. Today, the key to growth in the euro area is investment and innovation. But to innovate, in digital technology or in the energy transition for example, companies need to be able to take more risks, which requires more equity financing over the 1/3  BIS central bankers' speeches  long term, rather than debt financing. The euro area is seriously lagging behind in this respect: equity capital amounted to only 73% of GDP in the third quarter of 2017, compared to 123% in the United States. This brings me to my first solution for strengthening our Economic Union: a European-level "Financing Union for Investment and Innovation", which would better channel the euro area’s EUR 350 billion savings surplus into equity financing for innovation, in digital or renewable energy technologies.