European Financial Union is important step

The Bank of Portugal Governor believes the next step for growth within the European market is the creation of a Financial Union.

According to Carlos Costa, the importance of this union has become even more notorious since the crisis began.

He described how the current crisis resulted from “financial market schizophrenia” with Europe investing its savings in high risk assets outside of Europe.

“A Financial Union would mean the appointment of a European Minister of Economy and Finances. I actually believe we are closer to this reality than we expect,” said Costa.

The Bank of Portugal Governor feels the current model being used within the European Commission needs to be “reformulated”.

The creation of a single supervisory body for the Region’s financial policies would lead to the development of a single deposit guarantee scheme to ensure peace of mind for depositors.

Looking to the future, Carlos Costa reiterated the idea of financial convergence within the European Union and said “it is time to start thinking about policies for innovation and competitiveness, unemployment and territorial cohesion”.