Friday, November 22, 2013

ECB's Asmussen: "banking union is just the first start" toward fiscal union and then political union. "And that is what we are going to do in Europe"

Interviewer: ...[I]s there a message about the European Central Bank, about its mission, its goals, and its outlook, that you want to make sure this audience understands before you get on the plane and head back over the water?


Asmussen: ... We are deeply convinced that we need to integrate Europe further, where we have an incomplete monetary area. It’s in economic terms an unstable equilibrium. And we need to move this construction to a new stable equilibrium, and this in my view means more integration. And banking union is just the first start. We then need to continue… a true economic union, a fiscal union, a democratically legitimized political union, so to really, to complete EMU. And if one is not willing or not able to go down this route, it can be both, willing and able, then we will disintegrate. This could lead in economic terms to a stable equilibrium, but in my view at much lower welfare levels. So I would really say, let’s go down the whole way, banking union is just the first step. We should not stop there. I of course know all the skepticism towards more European integration. I can read polls as you can read polls for the European elections. But in my view political leadership is not that you look at the polls, say, ‘oh this is very difficult, the people don’t want it, so we don’t do it.’ I think political leadership is exactly the opposite, that one has a goal, explains why this is a good goal, names the pros and the cons and then simply then goes out and fights for it. And that is what we are going to do in Europe.