has been set up as a symbol for the existence of a “ community of destiny ” that is a monetary union. a common destiny engulfs solidarity. but solidarity presupposes responsibility. this means that crisis prevention mechanisms are even more important than crisis management facilities. and we have to recognize that before a fiscal deterioration occurs and needs corrective actions, we ought to detect early signals in the macro economic imbalances of economies that share a single currency. to overcome the macro - economic heterogeneity within the euro area, an explicit and clear framework for the surveillance of competitiveness is needed with the aim of correcting large imbalances. despite having a single currency and central bank, national economic policies remain insufficiently aligned. forty years ago (! ) the werner plan was very outspoken on this issue : “ having regard to the marked differences between the member countries in the realization of the objectives of growth and stability, there is a grave danger of disequilibria arising if economic policy cannot be harmonized effectively ”. the needed framework is not aimed at increasing the power of the commission in macroeconomic surveillance in the eu but at highlighting the euro area dimensions of surveillance and policy adjustments. this dimension requires more automaticity with a focus on countries with vulnerabilities, competitiveness deterioration and high debt levels. it should foresee graduated sanctions at a sufficiently early stage to reinforce compliance. it should take aim at national rigidities that are incompatible with a currency union, like automatic indexation mechanisms of wages and pensions. on the fiscal side, it is also worth remembering the emphasis that the werner report put on an independent fiscal authority. the quality and independence of economic analysis is crucial. several suggestions could be made in this respect, for instance increasing the role of the commissioner in charge of economic and financial affairs akin to the role of the commissioner in charge of competition. external assessment could also be provided by a committee of “ wise persons ”. quality and reliability of statistics need to be reinforced, deadlines in procedures reduced, scope of discretion of exceptional circumstances curtailed and more automaticity introduced. i hope that the van rompuy task force is bolder on those issues than were the commission ’ s proposals. to conclude : in line with the vision of the werner plan, the integration of europe as an evolutionary process has to continue. the financial crisis of the last three years has uncovered the institutional shortcomings of the current framework and exposed gaps in the existing economic governance regime.

yves mersch : after the emu rescue – which way for europe? speech by mr yves mersch, governor of the central bank of luxembourg, at a lecture in memory of mr pierre werner, organised by the official monetary and financial institutions forum ( omfif ), london, 14 october 2010. * * * your excellencies, ladies and gentlemen, neither the european coal and steel community treaty of 1950, nor the 1957 treaty of rome dealt extensively with currency. this might have been because convertibility after world war ii was not very wide - spread and capital controls were the norm. belgium was one of the first countries to establish free movement of capital but only within a dual exchange rate regime. this particularity had been one of the reasons for luxembourg to emerge as a financial activities center for europe. the principle of fixed exchange rates had been a feature of the international framework for currency stability after world war ii for the economies of europe, north america and japan. the bretton woods system was based on gold and the us dollar as the predominant monetary standard and worked for several years with almost no frictions. by 1968 a new era of currency instability threatened when market turbulence forced the revaluation of the german mark and the devaluation of the french franc. these developments clearly revealed the weaknesses of the bretton woods system as well as the threats to the common market and specifically the common agricultural policy. ideas of a new european currency framework gained momentum and luxembourg ’ s prime minister werner, also minister of finance, was asked to steer a committee mandated to design the path to an increased economic and monetary integration of the six then members of the european economic community. that report, finished on the 8 october 1970 and sent to the ministers of finance in the first instance, laid down the achievement of economic and monetary union by 1980. the youngest member of the committee and the only one still alive is prof. dr. hans tietmeyer. it was he who at the first meeting of the governing council of the ecb insisted on the seating arrangements to be changed from countries in alphabetical order to members ’ family name in alphabetical order. in doing so, he was truly loyal to the spirit of the werner plan. in deed, if it took another 20 years after the werner plan deadline before a single currency was established –, for reasons that would take another conference to explain – it is worth revisiting the werner report finalized 40 years ago. we can call it truly visionary. although many