In this lecture, ECB President Mario Draghi explains the current far-reaching process of reform in Europe. He argues for a ‘more perfect union’ in which sovereignty is determined by the capacity to contribute to the public good. The decision to create a single market in Europe led to a single currency – which in turn now requires a single banking union and a long-term adjustment of national fiscal policies supervised by common (EU) institutions. While this on-going process represents a further transfer of powers to the European level, it also eventually enhances the efficacy of individual national governments to pursue counter-cyclical fiscal policies – because these require a Europe-wide stable financial system in the first place. Therefore, if ‘sovereignty [in Europe] relates to the ability to deliver in practice the essential services that people expect from government’ (Draghi), it must unavoidably be shared between the supranational and national levels, with the latter being enabled to deliver ‘outcomes’ by having agreed to bind themselves irrevocably under a set of common rules and institutions. These commitments indeed remain unchanged. In this light, the current reforms in Europe attempt to ‘perfect’ the political project EU, which began many years ago: “[Many commentators] were wrong in a […] fundamental way. They had underestimated the depth of Europeans’ commitment to the euro. […] [The euro] is irreversible because it is born out of the commitment of European nations to closer integration – a commitment which, as the Nobel committee recognised last year, has roots in our desire for peace, security and transcending national differences.”
Read the full lecture here