specifications, which will be ready by the end of 2009. it will be followed by the development phase and subsequently the testing and migration phase. the envisaged go - live of the system is 2013. in parallel to the target2 securities project, the eurosystem launched the ccbm2 project ( correspondent central banking model ). ccbm2 will be a common platform for managing eurosystem collateral, i. e. the assets pledged to the eurosystem as security for its central figure of january 2009. bank credit operations, both on a national and pan - european basis. ccbm2 will be fully compatible with target2 and target2 securities. this creates synergies in the settlement of collateral for eurosystem credit operations and the release of the related credit to the financial institutions. 3. conclusion european financial markets have come a long way in the integration process. the progress achieved so far, however, leaves no room for complacency, as the recent disruptions caused by the financial crisis clearly warn us. the forthcoming ecb report on financial integration – which has a special focus on the effects of the 2007 - 2008 financial turmoil on the state of financial integration in the euro area – provides clear evidence that the financial turmoil has considerably affected the latest observations of the integration indicators. the usual indicators of financial integration – such as the cross - country standard deviations of money market rates, or government bond spreads – deteriorated gradually over the past year, with a dramatic acceleration in the last months of 2008. when comparing the available indicators for cross - country data with those built on national data, we see that interbank rates shows signs of divergence for all transactions, but more pronounced for cross - border ones. this suggests the presence of heightened credit and liquidity risks everywhere, but possibly larger for cross - border counterparties. given the impact of the current financial turmoil on the functioning of the financial market, it is of utmost importance to act in a concerted and co - ordinated manner to restore the proper functioning of the financial system. the competent authorities need to be vigilant that instability does not stop or even reverse the financial integration process. the eurosystem is following market developments very closely and it has been particularly proactive in money markets. it played an essential re - intermediation role, which was instrumental to support the functioning and integration of the money markets during the crisis period. payment and settlement systems have shown a remarkable resilience to the shocks that

which are necessary to understand historical change. the first level was the longue duree : the deep processes over long periods that shape the structures of economy and society. such a long term perspective is important to assess emu because a key objective is to further the historic project of european integration. the second level of time was the epoque : the trends that define a particular period of history. this medium - term perspective is also relevant because the treaty has set aims for emu which are best assessed over the medium - term – most notably ensuring price stability. the third level was l ’ histoire evenementielle : the events of the day that shaped the course of current affairs. this near term perspective is significant because the litmus test of any union is how it responds to unforeseen stresses and challenges – and emu has experienced just such circumstances together with all advanced economies since 2007. such a textured approach may give a more comprehensive picture of economic and monetary union. i will discuss each level in turn. bis central bankers ’ speeches the longue duree let me start with the long - term perspective, the longue duree. for braudel the longue duree concerned the slow and subtle effects of deep social and economic changes. it is an important perspective because emu is part of a historical process to deepen economic integration in europe, and thereby, as montesquieu famously argued, to make the countries of europe “ reciprocally dependent ; and their union is founded on mutual necessities. ” it would be fair to say that this ambitious aim has been achieved. the ideas for the start of a european community, presented as early as in the speech of robert schumann in 1950, for an economic and monetary union laid out in the werner report in 1971 and then in the delors report in 1988 have become reality. going further back, a single market with a single currency represents – to various degrees – the fulfillment of the visions of thinkers like victor hugo in the 19th century, immanuel kant in the 18th century, hugo grotius in the 17th century, and erasmus in the 16th century. emu has brought economic gains and thereby help lay the foundations for “ perpetual peace ” in europe. this wish for deeper integration is not only a philosophical pretension but also evident in the attitudes of european citizens. surveys indicate that, on average in euro area countries, more than 80 per cent of euro area citizens are in favour of greater policy coordination between