doubt, the monetary union is an ambitious project. it implies, from the first day onwards, irrevocably fixed exchange rates between the participating countries and a single monetary policy ; that is to say, a common central bank, identical central bank rates for all countries, a virtually uniform arsenal of policy instruments and much more besides. the euro will be a supranational currency. the single monetary policy will apply - unlike the situation in most other monetary areas - to several states that in other respects remain sovereign. on the one hand, the introduction of the euro will present new opportunities for integration. the economies of the participating countries will be able to grow more closely together. the common market will be afforded a new dimension. on the other hand, in order to realise the benefits, the euro area will have to fulfil two main conditions : first, the participating countries will have to be able ( both economically and in terms of anti - inflation policy ) permanently to relinquish the instrument of exchange rate adjustment relative to one another. and, second, the differing national traditions and structures which the countries bring into the monetary union will have to grow into a single whole. for instance, some countries have different policy traditions on issues such as : - what part can and should monetary policy play in the real economy? - which target has priority in the event of a conflict between domestic price stability and external exchange rate stability? in addition, national central banks have divergent backgrounds as regards their relations with the government and their standing in the eyes of the general public. in some cases, they also have different policy instruments, deployed in different ways. by such means, they have taken due account of the differing structures of the domestic banking system. establishing a monetary union implies building sustainable bridges across these differences. the single currency calls for joint answers to the underlying issues of monetary policy. the prerequisites are being elaborated at three levels : first, the choice of the participants at the start of monetary union is vitally important. this is to ensure that the range of countries remains fairly homogeneous overall with respect to their maturity for anti - inflation policy. second, the treaty of maastricht laid down the independence of the european central bank and of all the central banks participating in monetary union. the statute of the european central bank defines ensuring price stability as its priority target. in this way the treaty gives an unambiguous answer to the question of the fundamental orientation of the future monetary union

ahead, a return to a more normal liquidity management and to a more moderate scale of central bank intermediation is warranted to avoid distortions in financial incentives with longer - term adverse consequences for the economy. the ecb started in fact to phase out a number of non - standard measures back in late 2009. the maintenance of price stability over the medium term guides all monetary policy decisions. in this respect, the macroeconomic and financial landscape has fundamentally changed and the monetary policy stance has become more accommodative than at the peak of the crisis. as with the phasing - in of non - standard measures, there are no pre - defined steps between phasing them out and exiting from very low policy interest rates. non - standard measures can in fact co - exist with any interest rate level. the ecb will adjust its policy interest rates and its bis central bankers ’ speeches provision of liquidity at a pace and to a degree commensurate with the evolution of risks to price stability and as appropriate to maintain an orderly and functional monetary policy transmission. a number of key principles, which served the ecb well both before and during the crisis, will continue to underlie the post - crisis “ steady state ” design of the ecb ’ s operational framework. these principles are : operational efficiency, a strong market orientation, simplicity and transparency, and equal treatment of our counterparties. [ in line with these principles, the ecb equipped itself with a broad operational framework from the outset, including the eligibility of a large number of counterparties and a wide set of collateral in refinancing operations. at the same time, the post - crisis operational framework also needs to be designed in a way that contributes to shaping a healthy banking sector, even if proper incentives should essentially come from sound regulation and supervision ]. 3. the future of central banking and main challenges ahead what are the desirable features of a post - crisis “ steady state ” monetary policy framework? on this subject, i would like to make a number of points. as i mentioned already, the “ core ” elements of the monetary policy paradigm have emerged from the crisis unscathed. i firmly believe that price stability is the best contribution that monetary authorities can make to overall economic welfare. price stability should remain the primary task and the key “ deliverable ” for central banks in the period ahead. if anything, the crisis has reaffirmed the importance of having a clearly defined objective for price stability, not