first be a member of the european union before it can adopt the euro. the eu treaty lays down the criteria that european states have to respect before they can apply for eu membership. 2. the roadmap and the conditions for the adoption of the euro are laid down in the ec treaty. only based on the principle of a high degree of sustainable convergence an eu member state can adopt the euro. 3. each and every one of the countries participating in the european monetary union has followed one and the same route towards the adoption of the single currency, based on the principle of equal treatment. as regards procedures, the road to the euro consists of two stages. as i said, all 15 participating countries have gone through the same stages, and have been required to fulfil the same criteria : stage one is the accession to the eu. eu - membership requires the fulfilment of the copenhagen criteria. • alongside a number of political criteria that require stable institutions guaranteeing democracy, the rule of law, human rights and the protection on minorities, as laid down in art. 6 of the eu treaty, • candidate countries need to have a functioning market economy, able to withstand competitive pressures within the eu. • moreover, the candidate country has to fully implement the eu ’ s rule - book, the so - called acquis communautaire. the fact that a country must first join the eu before it becomes a member of the euro area is not a coincidence. it is a deliberate approach, which underlines the fact that the eu is more than a mere economic undertaking. after all, a currency is a key attribute of sovereignty. sharing a common currency implies sharing a common political destiny. stage two is euro area accession. a country that has joined the eu has the obligation to eventually join the euro area. however, it does not adopt the euro immediately upon its accession to the eu. instead, it becomes what is called in eu - term a “ member state with a derogation ”. countries in the derogation phase have a number of obligations. • upon accession of the eu, new member states are required to treat their exchange rate policy as a matter of common concern and to pursue price stability as the primary objective of monetary policy. the treaty foresees that at some point following accession, new member states will join the exchange rate mechanism ii ( erm ii ). • moreover, they have to regard their economic policies as a matter of common concern. the

jorg asmussen : eurozone cross - fire : the way out of economic recession – assessment of a realist and a response to idealists and cynics speech by mr jorg asmussen, member of the executive board of the european central bank, at the bank of america / merill lynch investor conference, washington dc, 20 april 2013. * * * sylvie, laurence, ladies and gentlemen, thank you very much for inviting me to speak at today ’ s investor conference. introduction the eurozone can be difficult to understand. especially when seen from this side of the atlantic, the complexities of the macroeconomic and financial situation and of the political dynamics in europe can be baffling. to cut through the complexity and amidst fragile confidence and the “ noise ” of crisis management simple answers and “ once - and - for - all solutions ” seem attractive. unfortunately, this kind of answer is an illusion. because the crisis in the euro area is multifaceted. it is, at once, a crisis of public and private debt, a crisis of competitiveness and growth, and a crisis of trust ; in institutions, in politics and in decision - making. tackling the crisis successfully and comprehensively will require solutions for all of those. when i read the commentary, especially over here, on the crisis in europe, i often see two stereotypical responses, those from what i would call “ idealists ” and those from “ cynics ”. first, the idealists : they say the euro area is too heterogeneous and divergent. they say the euro area must integrate completely, or risk breaking up. as a solution to resolve the crisis, they allege that only a move to a “ united states of europe ” will do, with joint issuance of debt, a transfer mechanism, and “ the works ”. then there are the “ cynics ”. they accuse europeans of practising “ medieval medicine ” – bleeding the patients in a bid to cure them. they contend the “ bitter pill of austerity ” will kill the patient, and the people will not take it any longer. they say that overcoming the crisis will need more time, less austerity ; more public money, less reform. and they often call on the ecb to do more. i believe none of these caricatures reflect the reality of the response in europe. the us journalist sydney j. harris once wrote “ an idealist believes the short run doesn