Reduce divergences in the euro zone by regulating financial cycles.

Summary The euro zone suffers from economic and financial divergences between its members. Monetary policy cannot remedy this, since it is a single policy, calibrated and implemented for the average member of the zone. It can even increase them by acting alone, without any other economic policy lever to complement it. This makes a new policy mix in the eurozone urgent, taking into account the fact that the zone is heterogeneous and subject to financial cycles that are not very synchronous. Seeking economic stability through financial stability is possible within the framework of macroprudential policy, whose countercyclical action can be calibrated by country, while being coordinated at the level of the zone by an institution already in place, the European Systemic Risk Council. The euro zone would thus have the macroeconomic adjustment instrument that it has lacked since its inception.