gertrude tumpel - gugerell : a case for rapid euro adoption introduction for panel discussion by ms gertrude tumpel - gugerell, member of the executive board of the european central bank, at the austrian national bank conference on european economic integration on “ the euro ’ s contribution to economic stability in cesee ”, vienna, 16 november 2009. * * * ladies and gentlemen, 1 it is a pleasure to be at this conference among such distinguished panellists to speak about the european economic integration and the adoption of the euro. for us at the ecb, the topic of the optimal timing of euro adoption for the eu countries in central and eastern europe ( cee ) that have not yet done so is very important. according to the maastricht treaty, all eu countries are called upon adopting the euro at some stage. so it ’ s not a question of if, but rather on when to join. however, to ensure that the monetary union is working smoothly, it is essential – and the maastricht treaty has foreseen this – that the countries joining the euro area have achieved a sufficient degree of sustainable convergence. this is first of all in the interest of the country concerned. moreover, sustainable convergence is a cornerstone of the european monetary union on which the success story of the euro is built. since its introduction back in 1999, the euro has become one of the major currencies of the world. the low inflation environment in the euro area can be largely attributed to the well anchored inflation expectations and the high credibility of the ecb ’ s monetary policy strategy to ensure price stability over the medium - term. during the global financial crisis, it became apparent that the euro has been an important shelter for the euro area countries to protect them against what otherwise may have resulted in an exchange rate and balance of payments crisis. this led to the widespread perception that the euro area is a safe haven. let me in the following speak about the economic situation in the cee countries and their prospect on joining the euro. the cee countries have been strongly hit by the financial crisis following the bankruptcy of lehman brothers, the cee countries have been strongly hit by the global financial crisis, although at varying degrees across countries. due to the slump in global activity, heightened risk aversion by international investors and a de - leveraging by financial institutions, most cee countries have seen a significant weakening of export demand and a substantial worsening of their external financing conditions. it seems

economies ( in particular montenegro ) have also illustrated, the unilateral adoption of the euro is not the magic tool that automatically provides protection against the impact of external shocks. concluding remarks let me conclude my remarks. the cee countries have already made significant progress with respect to their catching - up with the euro area. however, some of the countries have been severely hit by the financial crisis. this clearly has an impact on the state of the convergence process of the cee countries and has potentially moved euro adoption further into the future. the timetables of the euro adoption have to be carefully assessed, given particularly the large uncertainties that are associated with the current economic and financial situation. one thing, however, needs to be very clear. the financial crisis has not changed our policy for adopting the euro. therefore, to prematurely adopt the euro, in particular if not accompanied by a sufficient degree of sustainable convergence, is certainly not a solution to overcome the impact of the crisis. only a credible euro adoption strategy helps stabilising the economies, also with respect to the crisis impact. achieving sustainable convergence can be seen as an important anchor and an opportunity for the cee countries to adopt economic policies that will eventually lead to the successful adoption of the euro, hopefully not in the too distant future.