european leaders ’ inability to lead a uniform foreign policy for all the union ’ s countries. the union ’ s citizens for their part said “ no ” to a more unified europe ( in two referenda in france and the netherlands ). can the currency bloc exist in the long term without political unity behind it? jean - claude trichet : “ economic and monetary union was decided on in the maastricht treaty ( of which trichet was one of the architects s. h. ). the treaty has an internal logic, especially since it dealt with the question of budgetary policy by way of an agreement between the member states concerning stability and growth ( the stability and growth pact, which inter alia limits deficits to 3 % of the budget s. h. ). we have a coherent bloc of the economic and monetary union. as far as decisions on political union are concerned, europeans can make do with the present union and also go further or even further still. this is an open question. it is the people of europe who will decide on this. ” at the same time, trichet wishes to stress that within economic and monetary union, emu, there is a built - in element of political union. “ after all, there is a great deal of political union in the decision to place budgetary policy under the surveillance of peers. this is the very heart of politics, voting on the budget. as a citizen, i have preferences as far as europe ’ s future is concerned. everybody knows that i am in favour of more significant political union, but this is a personal view. as president of the ecb, i consider the present economic and monetary union fully consistent and coherent. ” and yet, can the european union exist in the long term without all of its member states being part of the single currency? jean - claude trichet : “ of the 25 current member states of the european union, only two have a clause that confers on them the right not to be part of the single currency, the united kingdom and denmark – and denmark is following the monetary policy of the ecb. all the other member states are supposed in principle to enter the euro bloc when they meet the criteria ( today, only the 12 stable economies are part of the monetary union s. h. ). either way, we already have 313 million citizens in the euro bloc. ” the uk economy is nevertheless one of the leading economies in the european union. if such a significant component of

provide services to small businesses, increasing the extent to which they compete with community banks. these changes have posed significant challenges for community banks. even so, many community banks have thrived, in large part because their local presence and personal interactions give them an advantage in meeting the financial needs of many households, small businesses, and agricultural firms. their business model is based on an important economic explanation of the role of financial intermediaries – to develop and apply expertise that allows a lender to make better judgments about the creditworthiness of potential borrowers than could be made by a potential lender with less information about the borrowers. a small, but growing, body of research suggests that the financial services provided by large banks are less - than - perfect substitutes for those provided by community banks. 4 consistent with this view, one study finds that the increase in competition from large, geographically diversified banking organizations has not affected the profitability of community banks in urban areas. there is some evidence of a profitability effect in rural areas, but it is actually more likely to be positive than negative. 5 thus, for most community bankers, the increased presence in their local markets of large, geographically diversified banking organizations appears not to adversely affect profitability. this circumstance may be due to the fact that a see, for example, robert adams, kenneth brevoort, and elizabeth k. kiser, ( 2007 ). " who competes with whom? the case of depository institutions, " journal of industrial economics 55, pp. 141 - 67 ; andrew cohen and michael j. mazzeo, ( 2007 ). " market structure and competition among retail depository institutions, " review of economics and statistics 89, pp. 60 - 74 ; and timothy hannan and robin prager, ( 2004 ). " the competitive implications of multimarket bank branching, " journal of banking and finance 28, pp. 1889 - 1911. see timothy hannan and robin a. prager, ( 2009 ). " the profitability of small single - market banks in an era of multi - market banking, " journal of banking and finance 33, pp. 263 - 71. branch manager at a large depository institution typically does not have the same local connections and relationships as a community bank president. furthermore, although survey data indicate that small businesses have increased their reliance on large banks and non - bank financial service providers in recent years, the data show that these same firms have not reduced the average number of financial services