industry. difficulties are bound to arise in every region across the globe, and could have adverse ( if temporary ) economic effects. unless resolute steps are taken to resolve the year 2000 issues in all parts of the world, serious consequences are inevitable. the bundesbank ’ s preparation for y2k although you may get a different impression from recent media reports, in germany preparation for the century - datechange is in full swing and not at all behind the progress in other western european countries. let me describe briefly the activities in the financial sector, seen from a central banker ’ s perspective. the bundesbank - like other eu central banks - is confronted with the y2k problem in many respects. internal preparatory work for the year 2000 change started in good time. the bank ’ s management set july 1, 1999 as the deadline for making all affected systems and technical devices year - 2000 - proof. by that date, all computer - infrastructure facilities ( systems and networks ) and data - processing application procedures will be available in tested year 2000 - proof versions. an earlier date is not possible, because conversion work for stage three of european monetary union is to be completed as a priority. in this context, by the way, a lot of preparatory work, mainly in applications for accounting and payment systems, will automatically be included with respect to y2k. with regard to the context of national payment and settlement systems, however, the bundesbank acts as a key service provider but also as a central co - ordinator for cashless payments. the bank ’ s clearing facilities offer all credit institutions involved in payments a competitively neutral payment service for settling large - value and retail payments. naturally, we have a strong interest in the smooth functioning of our it - infrastructure. so i am happy to tell you that the bundesbank has created a test environment for its public and private clients that is already in use. in the area of large - value payments as in the other procedures of electronic access, the bundesbank is offering interface tests for verifying year - 2000 - compatibility in interbank settlements. the electronic access test - centers are also available for the tests. customers and software manufacturers can make direct arrangements with the relevant test center for the tests to be conducted. in the field of retail payments, the bundesbank, as the primary “ interface ”, provides its customers with the year - 2000 - compatible processing of payment data. it will also ensure that its data - processing

as well. and it applies to the european debt crisis in equal measure. twenty - five years ago, the european council tasked a group of central bank governors chaired by jacques delors, then president of the european commission, with identifying ways in which a european monetary union could be structured. the delors committee ’ s insights can teach us a number of key lessons to this very day. for many of the problems weighing down on monetary union today had already been flagged and discussed by the delors committee all of 25 years ago. that makes it worthwhile taking a look back in time. bis central bankers ’ speeches my talk today will therefore be made up of three sections. in the first section, i would like to look at the delors committee ’ s key insights. in the second part, i would like to examine why monetary union began to flounder, and i will then use these conclusions in the third section to develop proposals for strengthening the existing framework. new problems, old questions a single currency fosters economic relationships between different countries. yet at the same time, it also increases the dependencies between them. this insight was a recurring theme throughout discussions within the delors committee. their line of thinking was based on the economic policy experiences of the 1970s and 1980s. that era of oil price shocks posed a major challenge to monetary policymakers. it became evident that countries with independent central banks had significantly lower inflation rates than those in which central banks followed politicians ’ instructions – while simultaneously achieving equal or even higher levels of growth. what we learned back then was that price stability does not run counter to economic prosperity, but complements and steadies it. but we learned something else, too. that an independent central bank is necessary for stable prices ; but more than that is needed. a country suffering excessive public debt and a lack of competitiveness can cause upheaval within a currency area, and this can also impact on monetary policymakers ’ ability to fulfil their primary objective of ensuring price stability. in a currency union, monetary policy can only serve its purpose if each member state ’ s economic policy is consistent with the requirements of a single currency. the members of the delors committee discussed two possibilities of ensuring sustainable economic and fiscal policies. the first option was to transfer these decisions to the european level. this line of thinking was supported, among others, by alexandre lamfalussy, then managing director of the bank for international settlements ( bis ). the other option was the