international currency. this encompasses the use of the euro for official reserve holdings and as a reference currency for exchange rate arrangements. statistics related to official reserves were published in the most recent international monetary fund annual report, and indicated that the share of the euro was around 13 % at the end of 1999. this is comparable with the weight of the legacy currencies one year earlier. the fact that stability is prevailing is consistent with the notion that central banks tend to be conservative in managing their reserve holdings. remaining in the sphere of international official reserves, the international monetary fund has recently decided on a new valuation method for the special drawing rights ( sdrs ), which comes into force on 1 january 2001. the sdr basket traditionally comprised five currencies of individual countries, including the deutsche mark and the french franc. the weight of each currency in the basket was determined on the basis of trade and financial data of these countries. in order to reflect the new economic area resulting from the introduction of the euro, the sdr basket will henceforth include the euro, instead of the deutsche mark and the french franc. its weight will be based on the importance of the euro area as a single economic entity. similarly, the euribor will be substituted for the german and french national interest rates in the determination of the sdr ’ s interest rate. these modifications underscore how the official international financial community is gradually adjusting to the new reality of the euro. as a last point, let me deal with the use of the euro as a reference currency for exchange rate regimes adopted by third countries. today, over 50 countries are managing exchange rate arrangements that include a reference to the euro. this involves a variety of regimes, ranging from very tight pegs ( ie currency boards ) to managed floating policies. geographically, these countries are located on the european and african continents. this is a difference with the us dollar, which is also used by a few countries outside the western hemisphere. the intensive trade and financial links with the euro area are the main factor behind the choice of the euro in the definition of exchange rate policies. for some countries, the european union accession process provides an additional impetus to select an exchange rate arrangement based on the euro. i should highlight that the choice of a euro - based exchange rate arrangement is a unilateral decision, and does not involve any commitment on the part of the ecb. however, this use of the euro as a reference currency may be seen as a sign

, it included, on an exceptional basis and solely for greece, a voluntary contribution of the private sector to write down the country ’ s debt and enable it to recover ; – lastly, it considerably bolstered the efsf ’ s scope of action. it is important to realise that this constitutes major progress, in particular from the point of view of european integration. no one would have imagined that this would have been possible a few years ago. however, it was not enough to contain the crisis. as of last august, against the backdrop of expectations of slower growth, financial market tensions increased again. a vicious circle developed between the risk of a greek default, uncertainties surrounding the debt of other euro area countries and their banking sectors. in other words, as sovereign debt had previously been considered a risk - free asset, banks purchased massive amounts of government bonds. this was especially the case in europe due to the interdependence of the economies and the free movement of capital. for instance, german and french banks have a relatively large exposure to greek, italian and spanish debt. the fear of a credit default by these countries therefore constitutes a risk of very heavy losses for banks. since this would ultimately affect the public finances of the states if it materialised, it in turn increases concerns about the fiscal soundness of these countries, creating a vicious circle. so you can see that much of this mechanism is not entirely rational. only the greek debt situation is truly critical, while all the other countries have solemnly undertaken to repay their debts in full and they are in a position to do so. moreover, i have regularly given the exact facts and figures concerning our banks ’ exposures bis central bankers ’ speeches and their ability to deal with extreme scenarios. but once this mechanism is set in train, it is hard to stop it. a little over two weeks ago, a european summit offered even more far - reaching solutions to calm the crisis : the efsf ’ s capacity was doubled, banks ’ capital is to be bolstered more rapidly than planned and greece ’ s creditors have accepted a 50 % debt writedowns ( compared with the 21 % agreed on 21 july ). i firmly believe that these are the right solutions. with this debt relief and the loans offered by the efsf, greece can achieve debt sustainability. i am sure that it will manage to do so if the agreements are fully implemented and if it meets its commitments in the areas of tax collection, structural reforms and