It’s always a mistake to underestimate the strength of the European project..

Benoit  Coeuve, member of ECB in this interview on the European project:

Q. Some European politicians deplore that the lack of speedy progress on eurozone reform means that the monetary union is ill-equipped to face another potentially serious shock. Do you share their pessimism?

A. Ever since the euro’s creation we’ve had economists predicting the end of the euro for the next year, and it’s still here. And investors know by now that it’s always a mistake to underestimate the strength of the European project. It is a long-term political construction. It being political doesn’t mean it is easy, and it has both positive and negative consequences.

On the positive side, it means that it is resilient when tested by short-term economic shocks. On the other hand, that means that any new integration steps involve a political process that must be approved by 27 governments, subject to local and national political interests. That involves slowness and procrastination, but the result is robust. Even after the crisis we have lived through, which has deeply scarred our economic and social fabric, the level of public support for the euro is at its highest in 20 years. That should be the basis for further progress.

Hmm. Whatever Euro critics might say the currency has survived and moved on…This is no mean achievement given how few people thought it would work at the first place. Having said that, there is no room for complacency and definitely not for any hubris.

On Mario Draghi’s retirement:

Market operators wonder about what will happen to Europe’s monetary policy once Mario Draghi is gone next November. How much does continuity matter here?

Our own monetary policy committee is the 25-strong Governing Council. Just like the Fed, and contrary to other central banks, we have many people taking part in the decision, so that in and of itself is an element of continuity. Most of our decisions in recent years have been taken unanimously, or by large consensus. The President has an important role, of course, but the overall approach and philosophy of the ECB is unlikely to change at the end of the year.



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