german - of doing the one without failing to do the other. in the triangular global political relationship between asia, north america and europe, the transatlantic community between the european union and north america, on the one hand, and asia - pacific economic cooperation ( apec ), on the other, already have an important part to play. i hope and confidently expect that in future the asian - european link in this triangle will increase in significance. an important initial step in this direction was the first european - asian summit meeting of heads of state and government here in bangkok just under a year ago. ii the two levels of integration are currently determining to a very large extent the work of european central banks. the challenges posed by the global markets are affecting all central banks worldwide in much the same way. but the tasks faced in the context of regional integration in europe are unique. after all, under the treaty of maastricht europe has set itself the target of a monetary union before the end of this century. the present year will be of crucial importance on the road to that goal. the timetable envisaged is as follows : the countries that will participate in the monetary union from the start will be ascertained in spring 1998. the participating countries will have to fulfil the following criteria, in particular : - stable monetary conditions as regards the value of money, the exchange rate and the longer - term interest rate level, lastingly sustainable public finance, and an independent national central bank. which countries that will be, will become manifest after the examination and decision next spring. to date, there have been forecasts, as well as some wishful thinking. but decisions or preliminary decisions have not been taken yet. monetary union is due to begin in 1999. at that date the participating countries will irrevocably fix the exchange rates of their currencies and introduce the euro. from the first day onwards, the european central bank will assume full responsibility for monetary policy. national central banks will become members of the european system of central banks. on the basis of the decisions taken by the european central bank, they will then implement monetary policy decentrally ( insofar as that is possible ). whereas the financial markets are expected to use the euro from as early as 1999, retail business is likely to go on using national currencies at first. this is because banknotes and coins denominated in euros are not due to be issued until the beginning of the year 2002. without any

herr gaddum gives his views on the challenges facing european central banks in the light of emu address by the vice - president of the deutsche bundesbank, herr johann wilhelm gaddum, to the 32nd conference of the governors of south - east asian central banks in bangkok on 13 / 2 / 97. i i consider it a great honour to be invited to speak at the conference of the governors of south - east asian central banks. professor tietmeyer was glad to receive your invitation and took it up with pleasure. he regrets very much that he is unable to be here. we regard the contacts and dialogue within the global central bank community as being most important and valuable. in addition, i would rate your invitation as being a reflection of your interest in europe, and in economic and monetary developments there. conversely, i can assure you that european interest in asia has increased tremendously in recent years. we are full of admiration for your cultural and economic achievements. we germans, in particular, are well aware that economic progress is neither a miracle nor a matter of luck. economic success has to do with wise policy decisions. and it also has to do with the capabilities and industry of human beings. the present day and age is distinguished by progressive economic integration. it is taking place on two levels. the one level is regional integration. in many parts of the world the regions are moving more closely together. this is mostly due to economic factors : creating larger markets and free - trade areas, and structuring the division of labour more effectively. in europe the economic motives are combined with political ones. the peoples of europe have learned from past conflicts. besides the economic merging, european integration is designed to help forestall tensions between countries and reconcile diverging interests. incidentally, regional integration is celebrating anniversaries this year, both here in south - east asia and in europe. asean will be thirty years old this year, and the european union forty. the other level of integration is globalisation, which is galloping ahead. here, several factors are combining and mutually reinforcing one another : - the internal decisions many countries have taken to open up their markets, the easing of restrictions on multilateral trade and, in particular, the huge technological advances in telecommunications and data processing. undoubtedly, one of the major challenges facing policy makers worldwide is that of fostering regional and global integration side by side, rather than in opposition to one another. it is a matter - as we say in