a commitment for the euro area. in this way, denmark can play a part, at least indirectly, in the anti - inflationary orientation of the euro, even if it does not join emu at once. naturally enough, the setting - up of an “ ems ii ” will, at the same time, enhance the responsibility of the european central bank. a stable euro is an essential precondition for the operation of an intra - european exchange rate system. i am convinced that the european central bank will be fully aware of precisely that international responsibility for the euro as the anchor currency. there will also be other links between the danish central bank and the european central bank : - the governor of danmarks nationalbank will be a member of the enlarged governing council of the ecb. and the central banks of the countries with a derogation are also invited to participate in target, the planned large - value payment system for the euro. in saying that, i would ask you to understand why there has to be a minimum of divergence in the terms of participation in target. those terms have to take account of the differing commitments of the central banks inside and outside the euro area. ii in order to explain the relationship between economic convergence and emu, there is, in the first place, a fairly simple textbook answer. by definition, a monetary union abolishes, once and for all, the instrument of exchange rate adjustment between the participating economies. the countries taking part must be able to do without that instrument for ever - even if structural changes occur. that calls for the ability on the part of each participant to keep up with the others in terms of economic and anti - inflationary performance, or - if it does fall behind - the ability to remedy a worsening of its competitive position by its own domestic efforts. these general requirements of a single currency area apply to the euro to a quite special degree. there are three reasons for this : firstly, in the supranational euro area - in contrast to the usual national environment of a currency - there will be hardly any fiscal policy mechanisms that would be able to counterbalance regional disequilibria. there will not be a dominant central budget. at the community level, there will be no network comparable to an internal, national system of income redistribution. the public financial systems and social security will remain in the national domain. secondly, any regional disequilibria in the euro area would scarcely be mitigated by high

common stance of this kind will undoubtedly be more difficult than for a traditional national currency area. whereas the currency will be supranational, it will generally remain the individual governments that will be taking the decisions on economic and social policy. that is all the more reason why the euro needs dominant patterns of preference which are common to all participants. that likewise implies the affirmation of major fundamental positions. firstly, maintaining the value of money is the best contribution that monetary policy can make to economic growth and employment. price stability is the foundation on which society and policy - makers can and must carry out the necessary adjustments. secondly, in the event of conflict, internal price stability must have priority over external exchange rate stability. thirdly, experience has shown that a central bank which is independent of the vagaries of dayto - day politics, and committed solely to the goal of price stability, helps to safeguard that indispensable price stability. by the way, that might be even more important in a supranational union than in a purely national context. these three basic convictions are essential to a durably stable currency. that is why they have rightly been enshrined in the maastricht treaty. article 107 lays down the european central bank ’ s independence of instructions. the statute of the european central bank requires it “ to maintain price stability ” as its primary objective. and article 109 ( 1 ) and ( 2 ) require the eu council to pursue external exchange - rate policy without prejudice to the objective of maintaining price stability. any calls for the political control of the european central bank or for different objectives were thus firmly rejected five years ago, when the treaty was signed. but it is, of course, not only the legal position created by the maastricht treaty which argues in favour of the primacy of price stability and its safeguarding by means of independent monetary policy. past experience and economic reason argue in its favour, too. it is important that this is perceived - and lastingly perceived - to be the case in all the participating countries. otherwise, political conflicts might impose a heavy burden on monetary union at a later date. the task of preserving a durably stable currency is, however, one which has to be faced in other policy areas, too. it cannot be a matter for the monetary policy of the european central bank alone - particularly since the ecb still has to establish its reputation and credibility in the first place. however great