jose manuel gonzalez - paramo : the euro exhibition address by mr jose manuel gonzalez - paramo, member of the executive board of the european central bank, at the opening ceremony for the euro exhibition at the museum fur kommunikation, berlin, 19 november 2009. * * * ladies and gentlemen, distinguished ambassadors and members of parliament, it is a great pleasure for me to be here in berlin, at the beautiful premises of the museum fur kommunikation to inaugurate “ the euro exhibition ”. i would like to thank the museum for its fruitful cooperation with the european central bank, which has given us the opportunity to display our euro exhibition here. this year we are celebrating the tenth anniversary of the euro. let ’ s take a look back at the short but memorable history of our common currency. on 1 january 1999 stage three of economic and monetary union began with the irrevocable fixing of the exchange rates of the currencies of the 11 member states initially forming the euro area. the number of countries participating in economic and monetary union has grown over the years. today, the euro banknotes and coins are legal tender in 16 of the 27 member states of the european union and are used daily by almost 330 million citizens in the euro area. the single currency is used in an area that stretches from cyprus to ireland and from portugal to finland. we are actually celebrating another anniversary this year. it is 20 years since the process of german reunification began and we all remember 9 november 1989 as the day which marked the fall of the berlin wall. let ’ s not forget that berlin itself is a city that occupies a special place in german and european history. indeed, currencies can play an important role in shaping a national identity and the deutsche mark is one of the strongest symbols of german reunification. the foundations for political reunification were laid by the treaty establishing monetary, economic and social union, which came into force on 1 july 1990 and enabled the east german mark to be converted into the highly regarded deutsche mark. these days it is the euro that is shaping a european identity. for many, the euro only became a reality when the euro banknotes and coins first entered into circulation on 1 january 2002, replacing national currencies like the deutsche mark. in the eight years that we have been using the euro in our day to day lives, once complex transactions have now become effortless : there is no need to exchange money within the euro area and transferring money within

another example - which is especially telling of integration - can be drawn from the rapidly expanding new european markets for technology and growth companies. underwriting the initial public offerings ( ipos ) of this type of firm is the kind of service where we should expect the greatest degree of national segmentation, since the companies are usually accessing the capital market for the first time - possibly as captive customers of local banks. however, the new listings during the first months of the present year show that in most cases a foreign institution was present alongside a domestic one. there are significant economies of scale associated with the shift in the dimension of the capital markets from national to euro area - wide. this seems to have already been one significant motive behind the recent bank mergers and acquisitions, also in the case of the deals that have taken place within national borders. although most mergers have been domestic, cross - border deals also increased in importance in 1999. by contrast with the services provided to other financial institutions and large corporations, retail activities referring to personal customers and small and medium - sized firms are still quite strongly confined to national borders. within the euro area, both lending and deposit - taking by banks are largely conducted with domestic residents - 91 % of loans and 87 % of deposits still refer to domestic counterparties. nevertheless, internationalisation is also progressing in this area ; the business with customers located in other euro area countries is growing faster than the domestic business in respect of all major balance sheet items of banks. separation of central banking and supervision in emu i should like to discuss next the relation between central banking and supervision in the new institutional framework defined by the treaty. as i mentioned, the third stage of economic and monetary union introduced a geographical separation of monetary policy and banking supervision - in addition to the possible functional separation of the two functions that already existed in some countries. this is the case because, for the euro area as a whole, banking supervision is now entrusted to institutions that have no independent monetary policy functions ( even if they are central banks ) and the eurosystem has neither direct responsibility for supervising banks nor for banking system stability. the main risk entailed in this institutional setting is the potential absence of an area - wide perspective of the banking and financial sector for the euro area. the national central banks continue to be strongly involved in the supervisory tasks : only in three euro area countries - belgium, luxembourg and finland - is the national central bank not directly involved in banking supervision. in all other eight countries, they are