The European Central Bank (ECB) president, Mario Draghi, has urged the leaders of the European Union on Monday complete the reform of the eurozone -mainly through improvements in the Banking Union and the creation of a stabilization function- in a context of economic slowdown.
"We have made significant progress in closing the holes in the architecture of the Economic and Monetary Union. (…) But they must and can make more progress ", said the Italian before the MEPs of the Economic and Monetary Affairs Committee of the European Parliament, which also stressed that" the next days, weeks and months "will be "Decisive" to achieve "tangible" results.
"I am confident that you (the MEPs) and the EU leaders will once again play an instrumental role in advancing the EMU agenda, so that we can have tangible results in the 20th anniversary of the euro », he remarked.
In this sense, Draghi recalled that the latest data show that economic growth has been "weaker than expected", with an increase of the eurozone GDP in the third quarter of 0.2%, compared to 0.4% registered in the two preceding quarters, reflecting a more subdued trade growth, but also "country-sector specific factors".
Thus, the president of the ECB explained that a gradual deceleration is "normal" and that sometimes it can be "temporary", but has also stressed that risks linked to growing protectionism, the vulnerabilities of emerging markets and the volatility of markets "remain prominent".
Therefore, he recalled that the eurozone is exposed to both global economic turbulence and risks linked to domestic policies "unsustainable" as a result of high levels of debt, lack of competitiveness and problems in the financial sector that may affect other countries of the currency only.
"In other words, an incomplete EMU has an impact on the economic and financial environment in which we conduct our monetary policy. Europe has learned this lesson in the hardest way, "he stressed.
For this reason, it has defended the need to improve the coordination of economic policies among the euro partners, a "vital" aspect for promote "solid" national policies that reduce the "domestic sources" of turbulence and increase the capacity of countries to absorb them when they materialize.
Secondly, it has defended the implementation of an "investment stabilization function", a fiscal instrument that helps maintain convergence "in the face of great exogenous blows". In his opinion, this instrument should focus on cyclical events and be conditioned on compliance with European fiscal rules.
Finally, he assured that completing the Banking Union and the Capital Markets Union is "essential" for the future of the euro zone. "If we want to avoid repeating the mistakes of the past, it is crucial to strengthen the resilience and integration of the financial sector, thus improving the transmission of our monetary policy," he said.