##ised composition entails a high degree of plurality, and diversity in terms of professional careers, personal experiences and even policy judgements, in some cases. the collegial principle makes the central bank council a sort of specialist parliament. daily issues, and party political interests, too, are to be left outside. karl schiller coined the term frankfurt areopagus - a term which has often been quoted since. the fact that this sometimes carries a slightly mocking undertone does not bother me too much, either. this collective responsibility, subject only to the legal mandate, and the central bank council ’ s concept of its own role as a specialist parliament are crucial preconditions of the bank ’ s independence. collective responsibility is, at the same time, a protection against external political influences. the specialist judgement, unencumbered by tactical and political considerations, is the basis of the legitimacy in taking decisions on interest rates and the money stock independently of political bodies. pointing to great individual achievements does not by any means discount the significance of the central bank council as a body. the authority of a specialist body always needs minds and personalities who also ensure the necessary continuity. i should like to mention two of my predecessors, both of whom are present here today : karl otto pohl and helmut schlesinger. and i would also like to bring to mind some great personalities of the 1950s, 1960s and 1970s. their names are inseparably linked with the post - war history of the german central bank : wilhelm vocke, karl bernard, otto veit, otto pfleiderer, karl klasen, karl blessing, otmar emminger. the history of a central bank is not only contained behind glass cases, in file folders, ceremonial speeches, or the like. no, more importantly, the history of a central bank lies in its reputation, or in its “ capital stock ”, so to speak. and it also lies in its “ institutional memory ”. by the way, five of the above - named personalities - vocke, bernard, veit, pfleiderer and klasen - played a key role when the bank deutscher lander withstood its first serious clash with the federal government in october 1950. at that time, the central bank council raised official interest rates by 2 %, contrary to the insistent urgings of adenauer and schaffer. that was a milestone on the road to a truly independent german central bank and to

##ly than in the past. failing this, there would be a risk of " too little " inflation being left over for the countries that are growing more slowly. specifically, the ecb governing council has already been recommended to extend the spread of its definition of price stability to 0 to 2½ %. behind this recommendation are model calculations which suggest that in future the countries of the euro area will have very different inflation rates. according to those calculations, the longer - term inflation rate in germany will run almost 1 percentage point below the emu - wide inflation rate. in this case, given an orientation to the 2 % mark for the euro area as a whole, an inflation rate of only 1 % would be left for germany. cf. ecb monthly bulletin, august 2000, p. 61. cf. kluver, a. and g. rubel ( 2001 ) : industrielle konzentration als kriterium fur die geeignetheit eines einheitlichen wahrungsraums ( industrial concentration as a criterion of the suitability of a single monetary area ). eine empirische untersuchung der europaischen union von 1972 bis 1996, jahrbucher fur nationalokonomie und statistik, 221, 1 pp. 68 - 86. because of the likely overestimation of the " true " rate of inflation by the measured rate, and the rigidities on the german labour market, sinn and reutter regard that value of 1 % as too low. in their study, they recommend the raising of the stability standard in the euro area by one - half of a percentage point, in order that the german inflation rate is not obliged to turn out lower than would be consistent with the bundesbank ’ s old stability standard. when assessing such policy recommendations, it must, however, be borne in mind that they are based not least on the extrapolation of differences in rates of productivity growth observed in the past. but historic figures for a specific range of countries cannot readily be applied to the future, since the pattern of catching - up and advanced countries may have changed significantly in the interim. for instance, finland and ireland have meanwhile reached a level of per capita income which is above the emu average. today, only greece, portugal and spain can be identified as definite candidates for catching - up. in the year 2000, their per capita income was still 33 %, 25 % and 18 % below the emu