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President of the European Commission
10 Anniversary of the ECB
Dear Mr. President Trichet, dear friend,
Ladies and Gentlemen,
It is an honour and a pleasure to be here in Frankfurt to celebrate this important anniversary.
10 years ago today, the European Central Bank and the European System of Central Banks were created. Just seven months later, on January 1st 1999, the euro was born.
The launch of the euro was a defining moment for Europe. Like the process of European integration as a whole, Economic and Monetary Union was a simultaneously visionary yet pragmatic project – a major step towards fulfilling the 'ever closer union' of the peoples of Europe. 51 years after the signature of the Treaty of Rome, the euro remains one of the most tangible signs of Europe's determination to forge a common future and work together to secure peace and prosperity for our continent.
The euro's creation was an extraordinary event. For 11 countries to voluntarily transfer of responsibility for monetary to a new supranational institution – the ECB - set a historical precedent.
We all remember the scepticism that prevailed at the time. Many said it could not be done, others predicted that Economic and Monetary Union would end in failure.
Yet a decade later, we can proudly declare the euro a major success. This is the view held by the Commission and the conclusion of our communication on EMU@10 that we adopted last month.
The European Central Bank is an integral part of such a success!
Today, the European Central Bank oversees an economic area that stretches from Finland to Cyprus, and from Portugal to Austria. With a total of 320 million Europeans, the euro area is the largest market in the developed world and the euro an international currency that stands shoulder to shoulder with the US dollar.
The euro has ushered in a decade of economic stability in the EU. It has promoted economic and financial integration and generated trade and growth among its members.
We have enjoyed historically low inflation and interest rates have fallen to their lowest levels in a generation.
Our economies have been protected from a series of global economic shocks like those originated by the terrorist attacks of September 11th, the bursting of the dotcom bubble and soaring oil prices and they continue to be sheltered from the worst of the economic turbulence we face today.
Supported by this stability, a striking 16 million jobs have been created in the euro area over the last decade. That's 2 million more than in the US and triple the number of jobs created in the preceding 10 years.
The euro's success owes much to the ECB. In 1999 the European Central Bank was a new institution, with no previous track record. The challenge was huge: to secure price stability in a just created economic entity, in which eleven countries were sharing a new currency. But the ECB managed very quickly to silence the sceptics. The ECB's skilful conduct of monetary policy over the last 10 years anchored inflation expectations around 2%, earning it a high degree of respect and credibility. The euro is currently the second most important currency in the world. What better evidence could one have of the euro's credibility? This could not have been achieved were it not for the way the ECB has carried out its duties as guarantor of price stability.
But it is not only with price stability that the ECB is concerned. Securing financial stability also belongs to its terms of reference. So it was not a surprise to see in August last year that the ECB was the first major central bank to respond to the outbreak of market tensions. Its swift actions have steered us through the financial turmoil in recent months and consolidated the ECB's standing in the world.
Let me also say that the European Central Bank and the European Commission
have established an excellent working relationship. And this in full respect of
the prerogatives of each of our institutions. Close cooperation between the
Commission and the ECB is key for the success of the euro, given our shared
responsibilities for governance and surveillance in the Euro area: the
Commission, as the guardian of the Treaties, including Economic and Monetary
Union, the ECB as responsible for the single monetary policy geared to price
Ladies and gentlemen,
Our economies currently face a number of challenges. In particular, inflationary pressures, originated namely by high energy prices, in a context of slow growth are a real concern. The rise in food prices is also a complex and real issue. That is why the Commission presented a Communication on food prices for discussion at the European Council in three weeks time. It is necessary, in our view, to secure a proper functioning of the food supply chain and of the retail sector. But it is not less important to help those who are more severely hit by the rise in food prices. The Commission intends to prepare a set of articulated actions to help the most deprived in the EU.
I am confident that the ECB will respond to the challenges of slow growth and inflationary pressures as proficiently as has been the case in the past.
Today, celebrating together 10 successful years of EMU and the ECB, is a moment of which all Europeans can be proud. It is a tribute to the vision, determination and ambition of all those who have contributed to its achievement.
I look forward to a bright future for our European single currency.