in energy prices, the increase in oil prices contributes to certain risks to price stability. however, this should not lead to sustained higher inflation rates, as long as the unions do not use the higher energy prices as grounds to demand additional wage increases. the monetary aggregate m3 rose in july by 5. 6 % compared with 5. 3 % in june. the money supply figures have recently been revised upwards and we still need to examine the factors responsible for these revisions carefully. measured by the moving average over the last three months, i. e. may, june, and july, m3 growth has moved further away from the reference value of 4. 5 % announced by the governing council of the ecb at the beginning of this year to 5. 4 %. this increase is largely attributable to the low opportunity costs of holding money. however, the gradual improvement in the economic outlook has probably also played a role. similarly, the development in lending to the private sector is not restrictive at present. annualised growth rates of just over 10 % do not, in any case, indicate that the conditions for lending are currently unfavourable. as previously explained, the money supply development of m3 plays a prominent role in our strategy. however, short - term fluctuations in the money supply should be viewed cautiously, not least because of the uncertainties associated with the brief existence of monetary union and the recent statistical revisions to the money supply figures. however, the most recent figures suggest increased growth. at the same time, the prospects for an economic recovery in europe starting this year and continuing into next year have clearly improved in the meantime. in addition to encouraging trends in the global economy, the stabilisation of output growth in the euro area has contributed significantly to this. however, the most recent industry and consumer surveys also give positive indications with regard to economic activity in the euro area. therefore, it is likely that economic activity will accelerate in the second half of 1999 and the year 2000. when assessing the risks for price stability, the ecb does also monitor the external value of the euro. the weakening of the effective exchange rate of the euro, which remained at around 8 % between the start of the year and early september, lent itself to an increase in import prices denominated in euro. taking into account all available information, the outlook for the preservation of price stability remains favourable. however, recently inflationary risks have increased slightly. in the coming months it will therefore be necessary to monitor developments in

mr duisenberg focuses on maintaining price stability in the euro area speech by mr willem duisenberg, president of the european central bank, at the swiss banking congress in zurich on 10 september 1999. * * * ladies and gentlemen, i was only too pleased to accept your invitation to this place of price stability between lake constance and the dufourspitze, to report to you on the first experiences with the euro. no other country in europe can rival the success of switzerland in combating inflation, and this is something of which you can be very proud. with the introduction of the single currency in europe, european integration has scaled new heights. since the beginning of this year, the governing council of the ecb has been responsible for the stability of the euro. monetary union means that for the whole of the euro area there is only one single monetary policy. the aim of this policy is to achieve price stability in the euro area as a whole. this means that there can no longer be a monetary policy designed to meet the needs of individual member states. therefore, it will be more important than ever for individual member states to push on determinedly with fiscal consolidation and to carry out structural reforms with the aim of enhancing the flexibility of the commodity and employment markets and improving the incentives for the creation and taking - up of employment. the governing council of the ecb determines the single monetary policy centrally. the governing council consists of the executive board of the ecb and the governors of the central banks in the euro area. monetary policy decisions are implemented by the eurosystem, which comprises the ecb and the national central banks of the 11 participating eu member states. the national central banks are, above all, entrusted with the decentralised implementation of the single monetary policy and the relevant activities in their countries. first, i should like to say that the launch and the first few months of the common currency have, in our view, gone well. the initial experiences with the euro and the single monetary policy have proved to be both positive and encouraging. we have currently achieved price stability and the prospects look good for this to remain the case in the years to come. the governing council of the ecb has become a truly supranational body. the members of the governing council clearly see themselves as committed to this joint cause. they take the whole euro area into consideration when discussing and taking decisions on monetary policy. the efforts made prior to and at the time of the changeover weekend at the