Improving EMU's incomplete architecture

THE Economic and Monetary Union (EMU), long dogged by failure to complete its initial architecture and design, faces both shorter and longer-term problems. Among measures to help resolve issues in the first category, the European Central Bank (ECB) on Dec 3, 2015, extended its asset-purchase programme by six months until end-March 2017, taking total asset purchases to 1.5 trillion euros (S$2.35 trillion) and broadening asset eligibility to include local and regional debt.

Inflation has been persistently below the ECB's 2 per cent objective since January 2013, below one per cent for almost two years, and b…