value, it is made clear that money is one variable which we look at very carefully in order to examine whether inflationary or deflationary pressures are tending to emerge. we do not, however, react mechanistically to changes in money growth. the formulation of the second pillar is also prompted by the potential changes in economic behaviour on account of the introduction of the euro. it is a broadly based assessment of the outlook for price developments on the basis of an analysis of monetary, financial and economic developments. in this context interest rates, the yield curve, wage developments, public finance, the output gap, surveys of economic sentiment and many other indicators are analysed. use is also made of forecasts produced by other bodies and internally for inflation and other economic variables. this brings me to the role of the exchange rate of the euro in our strategy. since our primary objective is price stability and since the euro area as a whole is a relatively closed economy with an export share of 14 % of gross domestic product, we do not have a target for the exchange rate of the euro, for example, against the us dollar. this does not mean, and it is good to underline this once more, that the ecb is indifferent to the external value of the euro or even neglects it. the external value of the euro is one of the indicators we look at in the broadly based assessment of the outlook for price developments. within that framework, we constantly monitor exchange rate developments, analyse them and shall act on them, if and when this becomes necessary. however, such action will never be mechanistic, nor will it be isolated. the external value of the euro and its development are analysed and considered in the context of other indicators of future price developments. the ecb also tries to assess international confidence in the still very young euro. of course, the level of international confidence in the euro is not the only factor determining its external value, nor is the exchange rate the only indicator of confidence in the euro. it is, for instance, encouraging to see how the euro has been received on the international money and capital markets. i am sure that an internally stable euro will also strongly underpin international confidence in this currency, as it has for other currencies in the past. as the currency of a very large area, the issue of the international role of the euro naturally arises. the ecb takes a neutral stance regarding this role. it will neither be stimulated,

effectiveness of a central bank. the better it is understood, the more successful a central bank is. apart from the activities i have already mentioned, transparency is achieved in several ways. every month, after the first meeting of the governing council, the vice - president and i give a press conference. i start the conference with a comprehensive introductory statement, in which i explain the decisions taken by the governing council and the underlying analysis and arguments for and against. this introductory statement is published immediately on the ecb ’ s internet web site. this is followed by a question and answer session attended by several hundred journalists. the questions and answers are also published on the internet shortly afterwards. all the members of the governing council frequently make speeches, give interviews and contribute to journals and books. thousands of people visit the ecb and the national central banks each year and, for our part, we and our staff attend many conferences and other public events. eu enlargement the european integration process continues. the euro should be made a success. i have already explained how we have started the process of doing that. some observers have criticised the eu for its “ obsession with its own internal dynamics ”, in particular in the context of european economic and monetary union ( emu ). with all energies focused on meeting the convergence criteria and the preparation for the launch of the euro, europeans outside the eu have wondered whether emu and enlargement are not mutually exclusive objectives. let me briefly comment on this issue. after the historic decision to complete the european single market in the 1980s, it was felt that economic integration should not stop at that point. to fully reap the rewards of economic integration within the community, a single currency was felt necessary ; a logic pointedly encapsulated in the title of one report : “ one market, one money ”. hence, the underlying idea of emu was to advance european integration and to ensure that full use would be made of the economic potential of the single market. this idea continues to be the focus of european policy - makers, as evidenced by the association agreements and the ongoing accession negotiations with a number of european countries, poland among them. good and mutually beneficial economic relations with third countries in europe and further afield are a pillar of eu policy orientation. recognising this, the principles of an open market economy with free competition are enshrined in the treaty on european union. emu will not weaken this commitment, but rather reinforce it. closer co - operation