- ordinary meeting of the summit of the eac heads of state decided that east africa should move expeditiously towards establishing a monetary union by 2012. the summit decided that a strategic framework to fast track the establishment of a monetary union should be developed for consideration by the next meetings of the council and summit. as part of the process of implementing these decisions, in october 2007 the economic affairs sub - committee of the mac met in entebbe to develop a strategic framework which can fast track eac monetary union in 2012. the sub - committee discussed the convergence criteria and timeframe ; the model protocol and institutional structure of the eac monetary union ; and harmonization of macroeconomic statistics. fellow governors, our role today is to consider the report of the economic affairs sub - committee report with a view to agreeing on a strategic framework covering the legal, institutional and organizational preparation for the region to achieve monetary union according to the timetable that has been determined by the summit. the first manifestation of a monetary union is a common currency. therefore the strategic framework must include a monetary policy by the five central banks that will serve to ensure that the unified regional currency will be stable in order to foster further economic and financial integration among partner states. while, it is conceivable that not all the partner states may be ready for accession at the same time on account of the failure to fulfil simultaneously all of the macroeconomic convergence criteria, the treaty established unequivocal commitment for all the partner states to join the eac monetary union and therefore, to adopt policies consistent with this aim. it is, therefore, axiomatic that the success of the eac monetary union will depend on the establishment of the eac currency and single monetary policy ; sustainable macroeconomic convergence among the partner states ; and a balanced policy mix between fiscal, monetary and other economic policies. the strategic framework should therefore provide for a mechanism for monitoring and coordinating partner states'economic policies to promote convergence. meaningful monetary and financial integration can be achieved only with a sustainable convergence of economic fundamentals, particularly price stability, and sound fiscal, monetary and structural policies. short of that, fellow governors, ladies and gentlemen, it may even, be counterproductive to try to artificially forge a monetary union. but failure is not on the agenda. our heads of state have decided that we must have a monetary union. our role is to help to deliver it. i cannot emphasize enough the need for sustainable macroeconomic convergence as the bedrock for

assessment of the future levels of inflation and unemployment. i find it helpful to summarize the relevant information in what i term a mandate dashboard. the dashboard provides real - time readings on current and expected inflation and unemployment. here ’ s what the dashboard looked like in the fomc meeting earlier this month. i ’ ll explain the dashboard starting with the inflation side. the first cell from the left is current inflation. the second cell is what inflation is projected to be in one year ’ s time. finally, the third cell contains a forecast for inflation in two years ’ time. the unemployment side is similar. the first cell from the left represents current unemployment. the second cell represents a forecast for unemployment in one year ’ s time, and the third cell is a forecast for unemployment in two years ’ time. of course, i have to be a little more precise in what i mean by inflation and unemployment. by “ inflation ”, i mean the change in the personal consumption expenditure price index over the preceding four quarters, excluding changes in the prices of food and energy. 1 hence, my measure of inflation in the dashboard is what is commonly called “ core inflation ”. i ’ m using core inflation because i view it as a good measure of overall inflationary pressures over the next two to three years. by “ unemployment ”, i mean the unemployment rate averaged over the three months in the current quarter. 2 the forecasts for future inflation and unemployment are the midpoints of the central tendencies of the projections of fomc participants that they released in november. it is important to note that the dashboard includes information from other current variables besides inflation and unemployment. the forecasts for inflation and unemployment could potentially be based on a wide range of information – anticipated changes in fiscal policy, changes in european financial markets and so on. so, basing policy on the mandate dashboard does allow policy to react to changes in these other economic variables. the fourth quarter of 2011 has not ended. hence, what i ’ m calling “ current inflation ” is actually the fomc ’ s projection of inflation from fourth quarter 2010 to fourth quarter 2011. with three quarters of data already in, this projection is likely to be an accurate one. the fourth quarter of 2011 has not ended. hence, what i ’ m calling “ current unemployment ” is actually the fomc ’ s projection of the average unemployment rate in this quarter. bis central bankers ’ speeches however, using this kind of dashboard does require monetary policy to