down, let alone stop, the fiscal convergence process. for one cannot rule out the possibility that monetary union, too, will run into stormy seas some day. in the long run, those hard times will probably demand more community spirit from all the participating countries. and they will demand a greater capacity to act and to take decisions from the eu. this makes it all the more important to rectify the present political deficiencies and to set the stage soon for more political “ community spirit ”. not in the sense of a political super - state, but rather in the clear distribution of responsibilities, and in the capacity to take political action at the european level. though aware of these political deficiencies in procedures and rules, i fully appreciate the current capabilities of the existing european institutions and their great support of the integration process. in particular, i welcome the fact that the recent summit of the european council in berlin has reached – besides the financial agenda – agreement on two important issues : the council has taken a quick and clear decision on the nomination of the president of the next european commission for a full mandate. and the council reaffirmed its commitment to include the democratic states in central and eastern europe in the integration process. in the presidency ’ s conclusions it is said : “ enlargement remains a historic priority for the european union. ” nevertheless, this priority calls for further reforms in the community. otherwise, observers may get the impression that, in some discussions, very little seems to have changed over the past thirty years. as long ago as the summit meeting at the hague in 1969, tension between enlarging and deepening the community was perceptible. at that time, just like today, the heads of government linked an enlargement of the community to reforms in the area of agricultural funding. and, as long ago as that, they didn ’ t dare to take the step towards a clear definition of functions, and towards a clear and new decision - making structure, able to respond quickly and subject to unambiguous parliamentary control. it seems almost like a miracle that, all the same, the community has since grown to fifteen member states, and actually introduced a ( hitherto successful ) euro in eleven countries at the beginning of this year. given these achievements, the community must not now rest on its laurels. the common currency has imparted new momentum to european integration. due advantage must be taken of that stimulus. i very much hope that the euro does not mark

. the royal instructions to the governor of hong kong and the basic law, illustrates that hong kong ’ s monetary autonomy has not and will not be eroded. in fact, hong kong has enjoyed an even higher degree of monetary autonomy after the transfer of sovereignty. 3. under the royal instructions, the governor could not assent to “ any bill affecting the currency of the colony or relating to the issue of bank notes ”, or “ any bill establishing any banking association, or amending or altering the constitution, powers, or privileges of any banking association ” without previously obtained the approval of the secretary of state. under the basic law, however, there appears only a corresponding general requirement. article 76 states that once a bill has been passed by the legislative council, all that is required for it to take effect is signing and promulgation by the chief executive. in addition, article 17 states that “ laws enacted by the legislature of the hong kong special administrative region must be reported to the standing committee of the national people ’ s congress for the record. ” but this article also states that “ the reporting for record shall not affect the entry into force of such laws. ” 4. on the other hand, unlike the royal instructions, the basic law also prescribes in considerable detail the financial systems to be practised in the hksar. for example, article 109 provides that the hksar government shall maintain the status of hong kong as an international financial centre. article 110 provides that the hksar government shall, on its own, formulate monetary and financial policies. article 111 prescribes that the hong kong dollar, as the legal tender in the hksar, shall continue to circulate. article 112 states that no foreign exchange control policies shall be applied in the hksar and that the hong kong dollar shall be freely convertible. article 113 stipulates that the exchange fund of the hksar shall be managed and controlled by the government of the hksar. it is unusual to have such detailed specifications in a constitutional law, but the transfer of sovereignty is a significant change and it is helpful to retain those effective features that contribute to hong kong ’ s success as an international financial centre in the form of constitutional law. these provisions have, of course, provided adequate safeguards for hong kong ’ s monetary autonomy. the reliability, credibility and transparency of our monetary policies are also greatly enhanced. the efficiency of market operations, which may be required from time to time for achieving our monetary policy objectives, has also been improved