respect to j. de boer / j. a. kamps – dollarisatie op de nederlandse antillen. een verkennende studie. una cahier, no. 21, june 1986. dollarization of the antillean economy, as they thought it sensible to first investigate the situation of similar countries with an experience in dollarization. to my knowledge, no followup has been given to this study. the discussion was again brought up in 2005 when it became clear that curacao and st. maarten would become separate entities within the kingdom, while the bes - islands ( bonaire, saba and statia ) elected to become an integral part of the netherlands. de nederlandsche bank ( conditionally ) advised to form a monetary union between the various islands instead of dollarizing the economy. this was in full conformity with the recommendation made in 2004 by the working group on governmental and financial relations headed by mr. jesurun ). 2 de nederlandsche bank also mentioned that a credible and independent central bank is important when forming a monetary union and that the bna has proved to be well - equipped for this task. 3 7. concluding remarks in view of the forthcoming changes in the kingdom ’ s statutes, curacao and st. maarten will have to decide on a very short term what to do with regard to their legal tender. although these islands are deemed too small to justify the costs associated with maintaining a local currency, our experience in aruba, which entails the existence of a local currency linked to the us dollar and a credible central bank, gives us strong arguments to continue with our dollar - linked florin. in choosing for such an option, curacao and st. maarten could continue to benefit from the financial soundness of the dollar, while still maintaining a certain degree of monetary independence. last but not least, i would like to point out that the currency choice, whether at the end it would be a local currency or the us dollar, is purely a stage for an economic act. depending on the actors, the outcome of the play would be a drama or a happy one. in the choice of a dollarization, the role of the central bank would be limited if not nihil, while that of the government would become even more prominent. there is a significant shift of responsibility. while the starting fiscal position for both st. maarten and curacao would be

between monetary and fiscal policies, their roles and limitations for macroeconomic stabilisation and the adequacy of the current stability and growth pact are ever more at the forefront of the policy debate. all these issues need to be addressed. i have already underlined the importance of a coherent and sound legal and institutional framework. we must, however, be aware that, even with appropriate rules and institutions, a monetary union is not immune to exogenous shocks and specific problems in any of its members. the emu needs stabilisation mechanisms to support member states facing serious financial difficulties while safeguarding the stability and cohesion of the group. this need is one of the major lessons of the financial crisis and the reason for the creation in 2010 of a temporary rescue fund, the european financial stability facility ( efsf ), and subsequently, in 2012, of a permanent institution, the european stability mechanism ( esm ). both the efsf and the esm have played a vital role in safeguarding the stability of the euro area as a whole, functioning as a common firewall and providing support to the most affected member states to resume or maintain access to sovereign bond markets. together with fiscal and structural reforms at european and national levels, the ecb ’ s unconventional monetary policy and the establishment of the banking union, these funds were instrumental in dealing with the worst of the crisis and to save the integrity of the euro. reform of the esm is on - going to reinforce its role, its operational capacity and the effectiveness of its instruments. this reform must be seen as an integral part of the agenda on deepening emu and needs to be ambitious. i have always argued that the esm should evolve towards a true european monetary fund, a robust crisis management body, incorporated into eu law. an independent and accountable institution with a clear mandate and adequate resources and firepower. these are necessary conditions for the development of win - win solutions. the work currently underway on the esm treaty should therefore not be seen as the final result, but as a step towards a more ambitious long - term goal. let me conclude. 3 / 5 bis central bankers'speeches during its first 20 years of life – and contrary to the initial bad omens – the euro ’ s institutional framework has proven its ability to overcome the difficulties stemming from the coexistence of economies in different stages of development, and sovereignty - sharing mechanisms have acted as a proxy for a central political power. today ’ s