Eurozone still not a complete monetary union, Draghi says

The project to create a single monetary union in Europe is still "unfinished", Mario Draghi told an audience in the Slovenian capital Ljubljana today (February 2).

It was important to ask why some eurozone governments had not followed the correct policies to succeed in the monetary union, Draghi said. "The euro area relied heavily on the notion that the integration process would itself create the incentives for sound policies," he argued.

This had not happened "in part because the single market process stalled", but also because the eurozone had lacked "some key institutions". In particular, the eurozone had lacked "a common system of banking oversight to monitor financial flows".

This had allowed some countries to mask "mounting competitiveness losses" with "unsustainable finance-driven growth". The eurozone had also had "only weak common decision-making for fiscal and economic policies".

Several important steps "have now been taken to address these issues," Draghi said. But without further reforms, he argued, the eurozone would "remain some way short of a complete monetary union", where countries took "collective responsibility for the euro area within common institutions".