prof. tietmeyer expresses his praise for dr. duisenberg as the committed champion of stability text of the laudatory address by the president of the deutsche bundesbank, prof. hans tietmeyer, in honour of dr. w. f. duisenberg, president of the netherlands bank and of the bank for international settlements, on the occasion of the award of the prize for the “ european banker of the year 1996 ” by the group of 20 + 1 in frankfurt on 3 / 3 / 97. i being elected in frankfurt is something rather special. i am not thinking so much of yesterday ’ s local elections. after all, for centuries frankfurt was the venue of the election of the german king, and later on of the holy roman emperor. today, however, we are concerned not with the emperor, but with the european banker of the year. and the votes were cast not by the seven princely electors, but by the 21 margraves of the international economic press. by electing wim duisenberg as european banker of the year, the group of 20 + 1 landed a triple coup. - - they honoured the individual : duisenberg, the committed champion of stability. they honoured the institution : the netherlands bank, that stronghold of stability. and they honoured the nation. the netherlands is today, in a sense, the model country - the shining example on the continent. ii while others were still moaning about the flood of economic challenges, the dutch were already starting to come to terms with them. they weeded out their social system. they increased the flexibility of their labour market ; they encouraged part - time working, widened wage differentials, seized the opportunities presented by the services sector. to be sure, even the netherlands still has some problems to contend with. but the adjustments are already paying off. unemployment is falling. employment is rising. and despite the difficult environment ( and, by the way, also despite almost identical exchange rate movements to ours ), economic growth has turned out to be exceptionally resilient. the long - standing traditions of the dutch are obviously still intact. after all, as seafarers and merchants, they have been obliged for centuries to satisfy the requirements of foreign markets. that is why today they are a good distance ahead of other countries in the adjustment process. i know, of course, that many of the dutch are not very fond of eulogies of their success. too much praise from outside might impede the domestic reform

process. and we know very well that even long - standing “ model pupils ” have to take care to see that their marks remain good. but i believe the dutch are sufficiently self - assured to be able to cope with praise, too. it is the ability to adjust flexibly that determines “ the ascent and decline of nations ”, and thus their currencies as well. the example of the netherlands, in particular, shows that an internally and externally hard currency helps to create jobs. admittedly, the political will to effect domestic adjustments, and the social consensus that they should be carried out, are also essential. the erstwhile pegging of the guilder to the d - mark has long since given way to coexistence on equal terms. nowadays it is not unfair to ask whether the guilder has not meanwhile itself become the new anchor currency in europe. in a sense it has, at any rate jointly with the d - mark. there are two reasons why the netherlands has been able to assume this role of the guilder as the “ co - anchor ” in the erm : - first of all, an economic reason : the markets see that the dutch are not dependent on importing their stability through the exchange rate link. their “ stability culture ” stands firmly on its own feet. - and secondly, a political reason : the netherlands has played a crucial part in ensuring that the erm exists at all in its present shape. this is because a critical situation arose in the summer of 1993, under the impact of upheavals in the erm. in the monetary “ summer gales ” of those days, it was suggested at times that germany should be relegated to the status of a spectator. but the dutch refused to unpeg the guilder from the d - mark. and the other member states then felt that the erm was of no particular interest without those two. the unambiguous stance of dutch economic and monetary policy is paying dividends. today dutch interest rates are below german rates, at both the short and the long end of the market, despite the slight increase in the last few days. whether de nederlandsche bank is already the actual “ interest - rate leader ” in europe is a question i would rather leave open. true, we at the bundesbank know that we cannot, and do not wish to, permit ourselves any signs of laxity. but for the time being we do not think that the turning point for