central bankers and international economists to explain these phenomena – also by giving technocratic speeches that aren ’ t much fun to listen to. and as we ’ re still at the beginning of this conference, i ’ ll try to concentrate on the very fundamentals. in economic terms, we have to deal with asymmetries – imbalances that exist for a longer time or that build up slowly over time. there may be differences in economic development, but we should not abstract from differences in infrastructure, institutions, and political and economic philosophies. all of those differences across borders are quite common. you may be thinking of specific regional disparities among african countries right now. but also in the euro area, “ convergence ” was a key word from day one. even today, although almost all 1 / 5 bis central bankers'speeches member states in the euro area are experiencing an economic upturn by now, economic cycles are not synchronous. and unemployment rates are highly divergent, standing at over 22 percent in greece and below 7 percent in ireland. so even 25 years after we initiated a far - reaching treaty of european integration, and after 18 years of sharing a common currency, we are not marching in step. those asymmetries and structural differences between neighbouring countries are not necessarily a bad thing. but in a monetary union, dissimilar developments have extensive implications for two important challenges : first and well - known to everyone here in this room, given its construction, a monetary union is more prone to imbalances because there is no longer a national currency with a floating exchange rate as a means of countering imbalances and regional economic shocks. however cruel a sudden revaluation may be for some parts of an open economy, it is very useful as an automatic response to crises. without nominal exchange rate flexibility, economies need to adjust through adjustments of the real exchange rate which is much more painful in practice. as a second challenge, in a monetary union the community may ultimately bear the consequences for imbalances that have emerged on the level of sovereign member states. this has been an unequivocal lesson from the crisis in the euro area. to describe how asymmetries became imbalances, let me briefly recap that large capital flow imbalances had built up for several reasons in the run - up to the crisis. then, suddenly, a mistrust overburdened regional financing, the economy, and especially fiscal cushion

states – which unsurprisingly want to retain their influence. thus, whatever institutional compromise is aimed at on the european level, it will touch on delicate national economic doctrines. this has been even labelled the “ battle of ideas ” about the euro. 1 it comes about quite naturally : reform solutions are built on narratives about causalities. and narratives about causalities quickly lead to responsibilities. in europe, quite resilient, opposed narratives have evolved in parallel to divergent economic realities. and in keeping with the confirmation bias, it tends to be easiest to find evidence for one ’ s own theory. this is why consensus about the scope of european responsibilities is still a matter of debate beyond those about restraining national powers. for example, the eu as a centralised entity that could mitigate imbalances would require a common understanding of good economic policy. so the challenge is not only about bridging differences in economics, but also about bridging gaps in ideas and political attitudes. 4. conclusion : easy to explain, tough to maintain ladies and gentlemen monetary integration is easy to explain, but tough to maintain. it usually comes with additional necessities, for each participating country and for the community as a whole. during my speech, i have emphasised both structural and reform challenges in the euro area. but of course, you won ’ t be presented with the full picture of the european project even from a central banker. this is because even though it is not ( yet ) a political union, it is to a great extent a political project. its worth can hardly be measured in economic terms alone. in fact, economists have frequently been surprised at the determination of integrationists. in all parts of europe, the union is not only seen as part of the problem, but usually also as part of the answer. recently, amidst a wave of euro - scepticism, people in my town of frankfurt held weekly demonstrations in support of europe. in this respect, the monetary union contributes to a search for common solutions as an – if you want to call it that – “ automatic response ” to political isolation. our union compels us to seek common solutions instead of separate policies. being here in pretoria i of course wonder what role this drive towards common solutions could play in africa in the future. if you ask me, it does not make structural challenges any easier. but if a currency union is not just a number of steps but a journey, i find it very comforting to see