Draghi Op-ed Singles out Germany
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ECB president Mario Draghi announced yesterday he was not planning to attend this week's economic forum in Jackson Hole, where he was expected to speak. Instead, today Draghi published an op-ed in a German newspaper that many believe was written in lieu of the planned speech.
In the editorial, Draghi said Europeans don't need to choose between extremes. In other words, they don't need to go back to the ways of the past or become the United States of Europe. Instead, Draghi feels the euro zone can create a new architecture for the euro area, which will suit its needs.
"This new architecture does not require a political union first. It is clear that monetary union does entail a higher degree of joint decision-making. But economic integration and political integration can develop in parallel," he said. "Where necessary, sovereignty in selected economic policy fields can and should be pooled and democratic legitimation deepened."
Draghi then singled out German, the country that has been the most vocal and effective in their opposition to increased fiscal integration.
"A new architecture for the euro area is desirable to create sustained prosperity for all euro area countries, and especially for Germany," the ECB president pointed out.
"The root of Germany's success is its deep integration into the European and world economies. To continue to prosper, Germany needs to remain an anchor of a strong currency, at the centre of a zone of monetary stability and in a dynamic and competitive euro area economy. Only a stronger economic and monetary union can provide this."
Draghi concluded his commentary by summarizing his vision of Europe's future.
"Those who want to go back to the past misunderstand the significance of the euro. Those who claim only a full federation can be sustainable set the bar too high. What we need is a gradual and structured effort to complete EMU. This would finally give the euro the stable foundations it deserves. It would fully achieve the ultimate goals for which the Union and the euro were founded: stability, prosperity and peace. We know this is what the people in Europe, and in Germany, aspire to."
In the editorial, Draghi said Europeans don't need to choose between extremes. In other words, they don't need to go back to the ways of the past or become the United States of Europe. Instead, Draghi feels the euro zone can create a new architecture for the euro area, which will suit its needs.
"This new architecture does not require a political union first. It is clear that monetary union does entail a higher degree of joint decision-making. But economic integration and political integration can develop in parallel," he said. "Where necessary, sovereignty in selected economic policy fields can and should be pooled and democratic legitimation deepened."
Draghi then singled out German, the country that has been the most vocal and effective in their opposition to increased fiscal integration.
"A new architecture for the euro area is desirable to create sustained prosperity for all euro area countries, and especially for Germany," the ECB president pointed out.
"The root of Germany's success is its deep integration into the European and world economies. To continue to prosper, Germany needs to remain an anchor of a strong currency, at the centre of a zone of monetary stability and in a dynamic and competitive euro area economy. Only a stronger economic and monetary union can provide this."
Draghi concluded his commentary by summarizing his vision of Europe's future.
"Those who want to go back to the past misunderstand the significance of the euro. Those who claim only a full federation can be sustainable set the bar too high. What we need is a gradual and structured effort to complete EMU. This would finally give the euro the stable foundations it deserves. It would fully achieve the ultimate goals for which the Union and the euro were founded: stability, prosperity and peace. We know this is what the people in Europe, and in Germany, aspire to."
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