the euro is present on all major financial markets around the globe. currency trading in euro has been going on for two and a half years. shares are denominated in euro on most european stock exchanges. the next and final step will be the introduction of euro - denominated banknotes and coins on 1 january 2002. the introduction of the new euro banknotes and coins is the final step which completes the creation of the single currency. with this changeover, the considerable benefits of the single currency will become apparent to european citizens. a natural advantage of the single currency is that it reduces transaction and information costs in the euro area. it enhances the function of money as a medium of exchange by lowering the costs typically associated with market transactions. generally speaking, money is an important component of any market economy. in a complex exchange economy, money is an important means of achieving decentralised co - ordination between the plans and actions of economic agents across time and space. the function of money as a medium of exchange is significantly enhanced by enlarging the area in which a single currency is used as legal tender not least since this eliminates exchange rate uncertainty within the currency area. the introduction of the new euro banknotes and coins in the euro area, which comprises around 300 million citizens, is in many respects a huge challenge. first, the launch of the euro banknotes requires an initial supply of about 14. 25 billion banknotes – representing a value of around €641 billion – to be available by a fixed deadline. second, the banking sector, security carriers, retailers and the cash - operated machine industry are closely involved in the preparations at an early stage, as a smooth cash changeover can only be achieved in a short period of time by systematic and co - ordinated interaction on the part of all the main participants. third, the successful introduction of euro cash is preceded by a goal - oriented information campaign to prepare the general public and professional cash handlers in europe for the new currency. the president of the ecb launched this campaign on 30 august and at the same time presented the details of the new banknotes to the public. this new currency which will be in some 100 days'time in our pockets, is our money, a tangible reality and a symbol of european integration in every sense of the word. the euro banknotes are produced with state - of - the - art security standards and combine many of the highly effective security features already used in the national banknotes of

announced that price stability according to this definition shall be maintained over the medium term. thereby, it provides the public with clear guidance for inflation expectations. in addition, the ecb's transparent framework facilitates the process of accountability of the ecb by providing a yardstick against which its performance can be assessed. the statement that " price stability is to be maintained over the medium term " acknowledges the existence of short - term volatility in prices, resulting from non - monetary shocks to the price level such as the effects of indirect tax changes or variations in international commodity prices. there are good economic reasons why monetary policy should be oriented towards the medium term. monetary policy affects prices with " long and variable lags ", so that a policy of fine - tuning the economy is, in practice, neither a viable nor a desirable option. it is evident that the ecb cannot be held responsible for short - term shocks to the price level, since it has little control over them. rather, assessing the outcome of the monetary policy of the ecb over the medium term ensures a meaningful and genuine accountability. having a well - defined goal is vital. in addition, the ecb, like any other central bank, also requires an analytical framework which facilitates the achievement of this goal. the ecb's strategy recognises that, in an environment of change and uncertainty, no single model or view of the world is likely to be fully adequate to capture the ongoing economic processes and the implications for price stability. the need to adopt a diversified approach to analysing and assessing information in an uncertain world was a main reasoning behind the adoption of the ecb's two - pillar strategy. the distinct, yet mutually - reinforcing perspectives of a complex and changing environment provided by the two pillars are the best tools with which the ecb can distil and master the information relevant for monetary policy - making. under the first pillar, the ecb assigns a prominent role to money. a broad array of aggregates, ranging from m3 to its components and counterparts, notably credit, are analysed in order to assess threats to price stability. assigning a prominent role to money guarantees that the fundamentally monetary origins of inflation will not be neglected in the analysis driving monetary policy decisions. the prominent role of money is signalled by the announcement of a reference value of 4½ % for the annual growth of the broad aggregate m3. this reference value defines the rate of growth of m3 which is consistent with price stability over