part of a broader history : the history of europe, and its singular achievement of making the transition from war to peace. as early as 1946, josef muller, who was a leading figure in the german resistance to the nazis and the founder of the bavarian csu, acknowledged that “ we need [ ed ] a european currency, because countries that share a currency will never be at war ”. the euro has indeed provided us with a strong symbol of unity among european nations. it is true that there is currently some euro - skepticism and a surge of populism, but, [ slide ] a clear majority of euro area citizens support the euro today. this is the case in all member states despite the severe economic downturns that some countries have experienced. from 12 at the start, the number of participating countries has risen to 19 today. 7 additional countries have decided to join the euro since 1999 – the most recent one being lithuania in 2015 –, and none has wanted to leave it. the euro is not a technocratic utopia : it is a political and democratic decision, supported 25 years on, with hindsight, by a clear majority of citizens. economic and institutional foundations 1 / 6 bis central bankers'speeches our foundations are partly political ; but the european edifice has also sound economic and institutional foundations. when reflecting on the euro at columbia university, the first thinker who comes to mind is naturally robert mundell and his theory of optimal currency areas which has been used by numerous economists to analyse the european monetary union and its chances of success. mundell himself has remained an ardent supporter of the euro. 1 he put forward a number of theoretical arguments to respond to the critics – including financial integration and capital mobility –, although recognising that the emu remains suboptimal ( like, to some extent, the american monetary union ). as mundell said in 2012 : “ the euro is more than just the icing on the cake on the single european market and the european union ( eu ), it is the glue that keeps the core of europe together. ” still, an argument frequently heard against the euro is that a currency cannot exist without a state. true, the government prerogative of coinage came to be accepted as an essential attribute of sovereignty, tying the state to the money supply ; but actually the state may manipulate the unit of account to the benefit of its own finances, for instance by monetising the debt, and such manipulations

francois villeroy de galhau : european central bank monetary policy and the resilience of the eurozone speech by mr francois villeroy de galhau, governor of the bank of france, at columbia university, new york city, 19 april 2017. * * * accompanying slides. i am grateful to p. antipa, l. py, t. mouakil, f. haas, ph. andrade, b. mojon and m. dujardin for their assistance in preparing these remarks. thank you for inviting me to columbia university and your school of international and public affairs ( sipa ). columbia university is well - known as an institution of excellence. what might be less well - known is that columbia has a unique relationship with france and with my institution, the banque de france. let me say from the outset that i will not comment on the current events in france and on our presidential election : i would just like to remind you that there are two rounds, the first one on sunday and the second one on 7 may. especially in moments like these, it is worth looking past the present, with a long - term view. the maison francaise on the campus was created 100 years ago. your french department is one of the best in the united states. moreover, the banque de france has always followed very closely and valued columbia academic production, including two concepts that i will use today : the research of robert mundell on optimal currency areas and the research of mike woodford on forward guidance. lastly, patricia mosser, now a senior research scholar here at sipa, used to work at the new york fed, and a number of banque de france staff have had the privilege of working with her over the years. so, patricia, allow me to thank you warmly for organising this lecture on the ecb ’ s monetary policy and the resilience of the eurozone. in europe, the euro construction process is pretty well - known, while the ecb monetary policy is often debated. in the united states, it may be the reverse : the monetary policy is often better understood than the euro construction process. thus i will deal successively with both issues before turning to the future and a call for action in europe. 1. the euro has strong foundations. political foundations as you know, the single currency was officially launched with the maastricht treaty in 1992 and introduced in 1999. but maastricht and the euro are naturally