question of the costs associated with the launching of the ecb and the escb is also important. the question arises only to the extent that the ecb is supposed to start from scratch and has to build credibility on its own. but it is certainly not the spirit nor the letter of the maastricht treaty ; it is certainly not the very nature of the monetary concept of the single currency. the single currency is neither supposed to start from scratch, nor to result from the averaging of the various currencies that exist within the european union. it must clearly and it will according to the convergence concept, have the legacy of the most credible and solid currencies participating in the erm mechanism. the euro, in any case, must be as solid and credible as are the most credible currencies in europe. * * * in conclusion, i would like to make three points - firstly, it is not only monetary union that we are preparing actively, but also economic union, i. e. political union in the economic field. we should not forget that the treaty itself provides for a higher degree of political union than is usually acknowledged, with the concept of coordination of economic policies and the provisions for fiscal discipline and sanctions. the stability and growth pact grants important powers to the council - i. e. the council of national governments which is the equivalent in europe of a federal government in a political federation. - secondly, one should not underestimate the degree of monetary stability already achieved by european countries. monetary stability is not only a project for the future, it is already a major achievement in many european countries. for example, seven countries have been participating in the erm without any change in their central parities for more than ten years. - thirdly, it is a false perception to view the necessary fiscal consolidation and monetary stability as constraints imposed by the maastricht treaty against the very interests of european countries. we would be implementing the same economic policies if there were no maastricht treaty, since they are based on some principles of sound economic management which are necessary to create jobs and tackle the problem of unemployment. finally, economic and monetary union and the creation of the euro will crown economic and monetary cooperation between european countries, notably france and germany which are the two pillars of it, and will foster prosperity, stability and peace in the european union.

of the automatic stabilizers of fiscal transfers because there is no federal budget. fourthly, it is stressed that there are important costs associated with the transition towards emu, namely the necessity to reduce overall fiscal deficits in the run - up to the single currency in accordance with the maastricht fiscal criteria and the necessity to embark on an excessively tough monetary policy after the creation of the single currency to ensure the global credibility of the ecb, which in this view will start from scratch. let me respond to these criticisms and try to demonstrate that the europeans have embarked upon a coherent economic and monetary strategy, responding as accurately as possible to the various questions i have just listed and paying due attention to the special nature of the european endeavour. as regards the first criticism, which i call the “ diverting from structural reform ” argument, i really think that it rests on a misunderstanding of the very nature of the monetary union : the essence of emu is the completion of the single market, which has been one of the boldest structural reforms ever launched in industrialized countries. on top of the common market which was the initial concept of the treaty of rome, the single market is marshalling the elimination of all non - tariff barriers, of all those barriers that are of a structural nature and are hampering the smooth circulation of goods, services and capital throughout the european union. in order to meet the single market targets, workshops have been set up everywhere in europe in all sectors of the economy and in all capitals to embark on the modernization and harmonization of regulations of all kinds. it is a major medium - term endeavour and an indispensable economic impetus to foster competition, economic growth and job creation throughout the single market. in this perspective, the single currency appears as the last decisive messier for the completion of the single market, eliminating the last barriers that still exist within the european union : no more additional costs for transactions, no more exchange risks, either justifiable or not amenable to appropriate hedging, and no more costs associated with these hedging mechanisms. throughout the single market, there will be the same visibility of all prices, thus permitting immediate price comparisons, cost comparisons and therefore fostering competition in all markets. my conclusion on this point is that the single currency will not prevent europe from embarking on eliminating economic rigidities, inducing market flexibilities and generating measures to cope efficiently and successfully with global competition. on the contrary, the single