report of sweden, we consider that the present swedish law is still not compliant with the requests needed for the swedish central bank to enter the euro. the same of course holds true for the uk. some mixed signals emerged from some accession countries, the most lately being the czech republic and most alarmingly poland. independence of central banks is, as you know, declined at least in two different forms. on the one hand, the independence of the institution, but also the independence of the people working in the institution, the so - called personal independence. the institutional independence has again two functions. one is the operational independence. each central bank must have all the instruments at its disposal and at its free disposal in order to execute all operations related to a central bank's core activity, in particular in the area of monetary policy, foreign exchange, as well as payment systems. on the other hand, i think the financial independence is also increasingly attracting attention. it means that a central bank ought to rely on a robust balance sheet in order to underline its independence. but financial independence also applies to the personal independence of the people running the central bank. i think that as a luxemburger i should not give anyone a lesson in this respect. the treaty has made the ecb responsible and accountable for the maintenance of price stability over the medium term. that is why it also has been shielded from political pressures. medium term price stability should not be sacrificed to meet short - term objectives linked to political and electoral considerations, risking to weaken the stability of the currency. 5. consensus building the second important element in the functioning of the european monetary institutions is the underlying principle of decision - making, namely consensus building. the approach of seeking a broad consensus rather than to resort to voting in my opinion has the following advantages. • it is shielding from pressures arising from national authorities ; • it allows continuous, multilateral check of time consistency and policy direction within the council, thus imposing a discipline on monetary policy and • it is countering any public suspicion that national bias may inform policy decisions. i think this approach has been a key element in the efficient functioning of the governing council of the european central bank up to now. it is representative of an european culture of decision - making which has served us well until now. therefore i think it ought also to be pursued in the perspective of accession countries adopting the euro in the medium term. now finally a word about monetary policy strategy. the monetary policy of the eurosystem,

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