1949 10 : “ i am certain that it is within our powers to overcome the dangers still before us, if we so wish. our hopes and our work point to an era of peace, prosperity and abundance and the inexhaustible wealth and genius of europe will turn it once again into the very source and inspiration of the world ’ s life. ” the european union remains to this day a unique political and economic experiment that has no equivalent in modern history. and we have from 2017, following the electoral cycle in europe, a unique window of opportunity. nothing should be taken for granted, but much is open. we should not let this opportunity pass us by. thank you for your attention. 1 “ tommaso padoa - schioppa : economist, policy - maker, citizen in search of european unity ”, speech by lorenzo bini smaghi, european university institute, fiesole, 28 january 2011. 2 source : european commission, reflection paper on the deepening of the economic and monetary union, may 2017. 3 european commission, standard eurobarometer 86, autumn 2016. 4 t. padoa - schioppa, “ capital mobility : why is the treaty not implemented? ”, address to the second symposium of european banks, milan, june 1982. 5 pietro catte, the reform of the international monetary system, background note prepared for conference in memory of tommaso padoa - schioppa, rome, 2011. 6 t. padoa - schioppa, “ the european monetary system : a long - term view ”, in f. giavazzi, s. micossi, m. miller, the european monetary system, cambridge university press, 1988. 7 banque de france, « cout des carences de coordination des politiques economiques dans la zone euro », bulletin de la banque de france, n° 211, mai - juin 2017. english version : “ cost of the lack of coordination of economic policies in the euro area ”, quartely selection of articles no. 46 ( banque de france bulletin ), to be published in summer 2017. 8 t. padoa - schioppa, “ capital mobility : why is the treaty not implemented? ”, address to the second symposium of european banks, milan, june 1982. 7 / 8 bis central bankers'speeches 9 see for instance : speech at bruegel in brussels on 22nd march

” challenge the first triangle i ’ d like to dwell on is the famous incompatibility triangle derived from the mundellfleming model of the 1960 ’ s, also known as the “ impossible trinity ” or the “ trilemma ”. this triangle has been used to argue that it is impossible to reconcile fixed exchange rates, full capital mobility and national autonomy of monetary policy. early as 1982, tommaso padoa - schioppa coined the term “ inconsistent quartet ” 4 ( quartetto inconciliabile ), thereby enlarging the impossible trinity to a fourth goal, free trade – a pillar of the treaty of rome. let me quote here an analysis by banca d ’ italia 5 : “ at first sight this may appear to be a puzzling choice, since from the strictly analytical standpoint the inconsistency between the other three elements holds regardless of the presence or absence of free trade. but in a deeper economic sense, taking trade into consideration was essential, since the costs and benefits of different positions along that three - way trade - off depend crucially on the degree of trade integration. ” and as tommaso padoa - schioppa wrote in 1988 : “ in the long term, the only solution to the inconsistency is to complement the internal market with a monetary union. [ otherwise ] it would be unrealistic to expect the community to be able to square a circle that has never been squared. ” 6 the early 1990 ’ s were indeed difficult times for the european monetary system : several countries were forced to realign their exchange rate or to withdraw as 2 / 8 bis central bankers'speeches from the mechanism, like for instance italy in 1992. it was that same year, with the maastricht treaty, that europe chose to move forward towards a european monetary union. tommaso padoa - schioppa was right in his belief and in his recommendation to create the euro. the euro has proven to be a great success which has delivered material benefits. first, price stability, which is the main objective assigned to the eurosystem, and which directly benefits euro area citizens ’ purchasing power. in the 18 years since the introduction of the euro ( 1999 – 2016 ), inflation has stood at 1. 7 % on average, compared with 4. 6 % in the 18 years preceding the introduction of the euro ( 1981 – 1998 ). second, lower interest rates, which are the