The European Central Bank (ECB) president Mario Draghi called for a new architecture for the euro area to enhance fiscal, economic and financial policies coordination, according to a local report published on Wednesday.
"A new architecture for the euro area is desirable to create sustained prosperity for all euro area countries, and especially for Germany," said Draghi in an interview with German newspaper Die Zeit, which was also published on the ECB's official website.
He said the surival of the single currency did not require the immediate creation of a political union.
All necessary measures to complete economic and monetary union are firmly within reach, Draghi said.
"It is clear that monetary union does entail a higher degree of joint decision-making. But economic integration and political integration can develop in parallel," he said.
According to Draghi, the euro area needed oversight over national budgets and needs to guarantee competitiveness. For financial policies, there needed to be powers at the centre to limit excessive risk-taking by banks and regulatory capture by supervisors, he added.
Political union could, and should, develop hand-in-hand with fiscal, economic and financial union, Draghi said. He said the challenge was to further increase the legitimacy of EU bodies commensurate with increasing their responsibilities and to seek ways to better anchor European processes at the national level.
Draghi stressed that a strong economic union was an essential complement to the single monetary policy.
"Building this will require a structured process with correct sequencing," he said.
"What we need is a gradual and structured effort to complete the European monetary union," Draghi said, adding it would give the euro the stable foundation it deserved and achieve the ultimate goals for which the EU and the euro were founded: stability, prosperity and peace.
Draghi promised three elements would remain constant for the ECB.
"The ECB will do what is necessary to ensure price stability. It will remain independent. And it will always act within the limits of its mandate," he said.
He defended the non-standard monetary policies of the ECB, saying it had to fix the blockages of monetary policy signals to ensure a single monetary policy and price stability.
"This may at times require exceptional measures. But this is our responsibility as the central bank of the euro area as a whole," Draghi said.
