Opening Remarks by Christine Lagarde, IMF Managing Director
“The Euro at 20 Conference” — Dublin, Ireland
It is a pleasure to welcome all of you to “The Euro at 20” conference jointly organized by the Central Bank of Ireland and the IMF.", "publishDate": "2018-06-25", "sections": [ { "heading": "Introduction / Context", "content": "- Remarks delivered by Christine Lagarde, IMF Managing Director, at “The Euro at 20 Conference” — Dublin, Ireland.\n- Theme: assessing 20 years since creation of the euro, taking stock of achievements, crises, lessons learned, and policy priorities for a strengthened “euro 2.0.”" }, { "heading": "Looking back — 20 Years of the Euro (Findings)", "content": "- The common currency capped a 50-year quest to tear down economic borders.\n- Today, 19 of 28 European Union members are part of the euro area, and the euro is the world’s second major reserve currency.\n- In the European Union, real GDP per person has increased 40 percent since the mid-1990s. (Real GDP per capita measured in purchasing power parity terms.)\n- In the run up to the adoption of the euro in 1999, strong convergence occurred in real income levels among the original euro area members; interest rates began to converge even before the common currency was introduced.\n- In some cases these shifts contributed to excessive borrowing, unsustainable growth levels, and eventually, the euro area crisis.\n- Several countries hit hardest during the global financial and euro area crises saw their income growth fall significantly behind that of their peers; many are only now recovering to pre-crisis levels.\n- Ireland case study:\n - Joined the European Communities in 1973; founding member of the European Exchange Rate Mechanism in 1979; signed the Maastricht Treaty in 1992.\n - Up until the crisis, Ireland experienced the “Celtic Tiger” boom beginning in the early-1990s.\n - In real terms, average Irish income per capita more than doubled since signing of the Maastricht treaty.\n - Growing financial integration supported rapid expansion of credit and unsustainable real estate booms in countries such as Ireland and Spain; when boom turned to bust, Irish banks ran into serious trouble, placing Ireland at the heart of the euro area debt crisis.\n - After difficult choices, sacrifices, and support from European partners and the IMF, the Irish economy has rebounded strongly." }, { "heading": "Taking Stock — The Current Moment (Actions and Institutional Reforms)", "content": "- Crisis-response institutions and actions:\n - The European Stability Mechanism and its predecessors worked with the IMF and provided over 250 billion euros in loans to the five countries hit hardest by the crisis.\n - The European Central Bank (ECB) signaled in 2012 its willingness to do “whatever it takes” to preserve the currency union.\n - Development of the Banking Union, including the Single Supervisory Mechanism and Single Resolution Mechanism, helped create a more unified banking sector.\n- Lessons learned:\n - The cost of the banking crisis, including protection of banks’ wholesale creditors, was largely borne by taxpayers in some cases; the new bank recovery and resolution regime is designed to make banks safer and limit the risk that taxpayers will be asked to help bail out banks." }, { "heading": "Looking Ahead — Euro 2.0 (Policy Recommendations)", "content": "- Christine Lagarde identifies three major areas for enhancing resilience and securing the euro area’s future:\n 1. Complete the Banking Union\n - Establish an adequate backstop for a Single Resolution Fund.\n - Implement a common deposit insurance scheme.\n - Rationale: insuring credit risks across member countries can weaken the “sovereign-bank doom loop.”\n 2. Integrate financial and capital markets\n - Ensure regulatory and supervisory capacities are prepared for the influx of financial firms moving to continental Europe — and Ireland — as a result of Brexit.\n - Over the medium-term, pursue greater harmonization of national insolvency regimes and securities regulations.\n - Example: European Venture Capital Regulation facilitates cross-EU venture capital financing for start-ups.\n 3. Introduce greater fiscal risk-sharing while reducing underlying fiscal risks\n - Avoid overreliance on monetary policy as in the last crisis.\n - Greater risk-sharing combined with larger national buffers would allow countries to avoid raising taxes and cutting spending during downturns.\n - The IMF proposed a central fiscal capacity described as “a rainy-day fund”; other proposals for a euro area fiscal capacity have been put forward.\n - Emphasis: every country must comply with common fiscal rules and reduce public debt where it is too high.\n- Complementary recommendation:\n - Continue structural reforms to address weaknesses holding back growth and to improve resilience and productivity." }, { "heading": "Framing and Urgency", "content": "- Current macro conditions described as “solid growth and steadily declining unemployment across the euro area” make this the time to act.\n- Quoted adages highlighting urgency:\n - Maria Edgeworth: “If we take care of the moments, the years will take care of themselves.”\n - John Fitzgerald Kennedy: “The time to repair the roof is when the sun is shining.”\n - Bono: “It is stasis that kills you off, not ambition.”\n - W. B. Yeats: “In dreams begins responsibility.”" }, { "heading": "Conclusion", "content": "- Securing the euro area for the next twenty years requires patience, creative thinking, and increased cooperation.\n- The objective: a euro area that is not merely a union of convenience in calm waters but “a strong shield amidst storms.”\n- Call to action for scholars and policymakers to identify problems and make progress toward solutions, with the IMF as a partner in the effort.\n\nOpening Remarks by Christine Lagarde, “The Euro at 20 Conference” — Dublin, Ireland, June 25, 2018.\n\n---\n\n\n References\n\n- Christine Lagarde\n- Ireland and the IMF\n- Speeches\n- PRESS CENTER\n- The IMF recently introduced our own proposal\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2018/06/22/sp062518-euro-area-integration" } ], "bullets": [ "[Markdown version](/en/news/articles/2018/06/22/sp062518-euro-area-integration/index.md)", "[Structured JSON version](/en/news/articles/2018/06/22/sp062518-euro-area-integration/index.json)", "[Bundle manifest](/en/news/articles/2018/06/22/sp062518-euro-area-integration/bundle-manifest.json)", "Published: June 25, 2018", "Remarks delivered by Christine Lagarde, IMF Managing Director, at “The Euro at 20 Conference” — Dublin, Ireland.", "Theme: assessing 20 years since creation of the euro, taking stock of achievements, crises, lessons learned, and policy priorities for a strengthened “euro 2.0.”", "The common currency capped a 50-year quest to tear down economic borders.", "Today, 19 of 28 European Union members are part of the euro area, and the euro is the world’s second major reserve currency.", "In the European Union, real GDP per person has increased 40 percent since the mid-1990s. (Real GDP per capita measured in purchasing power parity terms.)", "In the run up to the adoption of the euro in 1999, strong convergence occurred in real income levels among the original euro area members; interest rates began to converge even before the common currency was introduced.", "In some cases these shifts contributed to excessive borrowing, unsustainable growth levels, and eventually, the euro area crisis.", "Several countries hit hardest during the global financial and euro area crises saw their income growth fall significantly behind that of their peers; many are only now recovering to pre-crisis levels.", "Ireland case study:", "Crisis-response institutions and actions:", "Lessons learned:", "Christine Lagarde identifies three major areas for enhancing resilience and securing the euro area’s future:", "Complementary recommendation:", "Current macro conditions described as “solid growth and steadily declining unemployment across the euro area” make this the time to act.", "Quoted adages highlighting urgency:", "Securing the euro area for the next twenty years requires patience, creative thinking, and increased cooperation.", "The objective: a euro area that is not merely a union of convenience in calm waters but “a strong shield amidst storms.”", "Call to action for scholars and policymakers to identify problems and make progress toward solutions, with the IMF as a partner in the effort.", "[Christine Lagarde](https://www.imf.org/en/About/senior-officials/Bios/christine-lagarde)", "[Ireland and the IMF](http://www.imf.org/external/country/IRL/index.htm)", "[Speeches](https://www.imf.org/en/news/searchnews)", "[PRESS CENTER](http://presscenter.imf.org/)", "[The IMF recently introduced our own proposal](https://www.imf.org/en/News/Articles/2018/03/26/sp032618-a-compass-to-prosperity-the-next-steps-of-euro-area-economic-integration)", "[https://www.imf.org/en/home](https://www.imf.org/en/home)" ], "alternates": { "markdown": "/en/news/articles/2018/06/22/sp062518-euro-area-integration/index.md", "json": "/en/news/articles/2018/06/22/sp062518-euro-area-integration/index.json", "bundleManifest": "/en/news/articles/2018/06/22/sp062518-euro-area-integration/bundle-manifest.json" }, "generatedAtUtc": "2026-09-25T21:56:53.961Z" }