T EA U R, V. 1 N. 1/2014
The Exit from the Sovereign Debt Crisis: National
Policies, European Reforms and Monetary Policy
e road to European integration is a long and arduous one; it is not linear: we
often advance step by tiny step, but at times by vigorous leaps. e introduction
of the euro was one such leap; it was a denite advance but it certainly did
not complete the journey. e euro is a currency without a State; this is the
lack it suers from. e divergences, sometimes the didence, that still mark
the relations between the member states weaken the Economic and Monetary
Union in the eyes of the international community and in those of its citizens.
is incompleteness, together with the weaknesses of some member countries,
has fueled the sovereign debt crisis of the euro area. If the weaknesses have
engendered doubts about the sustainability of national public debts, the
incompleteness has raised fears for the integrity of the union, allowed the risk of
redenomination of the area’s nancial assets and liabilities in national currencies
to gather strength, and reintroduced exchange rate risk within a monetary
union, thus further weakening the position of the countries in diculty.
Without political union, European economic governance has been founded
upon budget rules and the ban on rescues between member countries; it
has relied on the pressure of the single market for economic convergence.
However, in many cases the budget rules have not been respected and the
* Governor of the Bank of Italy