Budapest hosted the second Lamfalussy Lecture Conference, named after Alexander Lamfalussy seen as the father of the euro. The governors of six central banks discussed a way forward for Europe.
“The governors of central banks at this conference acknowledged that what we need now in Europe, in the European Union and in the eurozone is not a traditional economic policy but rather we need brave reforms.
‘Mario Draghi launched an excellent programme. This effects the eurozone countries foremost, but also affects those outside the eurozone. Reduced yields of government bonds and increased liquidity help the growth of these countries as well,” Gyorgy Matolcsy, Governor Hungary’s National Bank told euronews.
A new narrative for Europe was the main topic of the conference. Creating it in an eclectic group of countries is a problem. Euronews correspondent Beatrix Asbot at the conference said: “In the 16 years of the euro this is the second deflationary period. Ever since there has been a debate over whether the common currency can be successful in an environment where all member states follow different monetary and political rules. A couple of days ago the Bank of England said common rules would be needed for the success of the euro.”
That thought was echoed as the governors attending the conference agreed stricter rules should be introduced and that for the system to work, member countries should share decisions on taxes and spending.
“It is clear that the eurozone needs stronger rules to regulate the many different forms of policy dominance that emerged through interdependence. It is not enough to have a good administrative machinery as Lamfalussy said, you need rules,” Benoit Coeuré, a member of the Executive Board of the ECB told the delegates at the conference.