. ii. the institutional and policy framework for economic and monetary union in europe friends from outside europe occasionally raise – understandably, i would say – rather fundamental questions concerning the construction of european monetary union. is a single currency for 13 – soon to become 15 – otherwise sovereign countries really a viable construction? there is a european central bank that formulates and implements a single monetary policy for the euro area as a whole, but there is no united states of europe – or whatever we may wish to call a european political entity that would resemble a nation - state. can a “ currency without a state ” really be solid and credible in the long run? the success of the euro during the first eight years of its existence has demonstrated that we have found some robust answers to this question : first, the very design of economic and monetary union took into account the dichotomy between, on the one hand, a supranational single monetary policy and, on the other hand, economic policies – such as fiscal, structural or employment policies – which have remained the responsibility of the member countries. how have we taken this into account? by creating appropriate institutions. “ nothing is possible without humans, but nothing is lasting without institutions ”, jean monnet observed with great prescience back in the 1950s. solid and appropriately designed institutions are indispensable. but additional ingredients are necessary for the successful and sustained performance of monetary union. the second essential condition pertains to the policy framework which should include : clear policy objectives, intelligent and enforceable rules, effective policy instruments appropriately assigned to objectives, and credible commitment to objectives and rules. for the monetary union pillar of emu, the independence of the ecb, which is enshrined in the treaty and safeguarded by the public ’ s support, and the clear unambiguous orientation of monetary policy to the preservation of price stability are the core elements of the institutional set - up and our monetary policy framework. these elements are solid and well - founded regardless of alternative views occasionally expressed. this institutional arrangement is functioning well, it is delivering price stability and favourable financing conditions and, as a result, it is making an ongoing contribution to sustainable economic growth and job creation in europe. not only have inflation rates been on average in line with the ecb ’ s definition of price stability, namely an inflation rate close to, but less than, 2 %, but medium and long - term inflation expectations have also remained firmly anchored to our definition of

- prints ) has now been successfully concluded and a zero - production run will be conducted in the autumn before mass production starts in early 1999. ( e ) payment systems the governing council endorsed a list of eligible securities settlement systems following an assessment of such systems against standards that had previously been laid down for their use in the credit operations of the escb. the list, which indicates those securities settlement systems that will be used by the escb and the conditions for their use, will be set out in the “ general documentation ”, to which i have already referred. in addition, the governing council approved a report on the “ assessment of eu securities settlement systems against the standards for their use in escb credit operations ”. it is intended to release this report during the next couple of weeks.