and enhance, through structural reforms, the flexibility of their product and labour markets. normally, the closer the exchange rate link, the more important it is that these preconditions should be fulfilled. this is particularly the case for currency boards. we are convinced that maintaining price stability in the euro area in a way which is credible, irrespective of the role that the euro plays in third countries, is the best contribution which the monetary policy of the eurosystem can make to favourable developments in the global economy. conclusion let me conclude by saying that globalisation makes the assessment of the economic environment a more intricate task and the transmission mechanism of monetary policy more uncertain. there will be an increased risk of exposure to the spillover effects of economic and financial disturbances, which will necessitate closer analysis of economic developments from a worldwide perspective. however, we are convinced that we have a monetary policy strategy which is designed in such a way that it can be adapted to varying situations and the new challenges arising from globalisation.

that the relationship between money and prices might be affected, in the short term, by the structural changes and behavioural and statistical uncertainties linked to the shift of regime associated with the move to stage three of economic and monetary union. therefore, the concept of a reference value does not mean that the eurosystem will change its policy stance or react in a mechanical way to deviations of m3 growth from the reference value. a careful analysis of the reasons behind monetary developments must always be carried out before drawing policy conclusions. the prominent role for money implies that monetary developments are thoroughly assessed for the information which they provide with regard to the outlook for price developments. monetary policy will react in such a way as to address the threats to price stability revealed by this analysis. in parallel with the analysis of monetary developments, a broadly based assessment of a wide range of economic indicators, including foreign and international developments, will help to inform the governing council of the specific nature of the macroeconomic environment and the disturbances to the economy on which monetary policy decisions normally depend. a reliance on a single indicator variable or intermediate target would not prompt the appropriate response in all circumstances. this is all the more true in view of the increasing role of external developments resulting from globalisation and financial market spillovers. the euro exchange rate plays an important role as it can have an impact on consumer prices, both directly via import prices and indirectly via exports and real activity. however, the strategy eschews mechanistic reactions to exchange rate movements. the emergence of the euro as an international currency with the concomitant reduction in the number of key players in international monetary relations requires an intensified exchange of information on international monetary issues. however, it should be recognised that international monetary policy coordination such as exchange rate targeting or the coordination of the “ global policy - mix ” could jeopardise the goal of price stability and endanger the credibility of monetary policy. it could also risk decreasing accountability and reducing transparency. this would clearly be very undesirable. it seems plausible that in the future further countries will consider anchoring, or decide to anchor, their currency either formally or informally to the euro or to a basket of currencies in which the euro would be a major component. given the prospects of eu enlargement, visible changes are likely to take place in this area in the near future. the sustainability of pegs to the euro will require that these countries have a sound banking system, follow credible and sound monetary and fiscal policies