jean - claude trichet : state celebrations for the introduction of the euro in slovakia statement by mr jean - claude trichet, president of the european central bank, at the state celebrations for the introduction of the euro in slovakia, bratislava, 8 january 2009. * * * dear president, prime ministers, excellencies, dear governors, ladies and gentlemen, the introduction of a new currency is an historic moment for a country, and the introduction of the euro in a member state through the treaty - based convergence process is an historic moment for europe. robert schuman stated in his founding declaration that europe will be made through concrete achievements which create tangible solidarity among its people. european monetary union is a concrete achievement, and the euro is a tangible sign of solidarity among its people. the euro is also a tangible sign of increasing economic integration in europe, which is to the benefit of stability and prosperity for its citizens. today, with slovakia ’ s adoption of the euro, we therefore have every reason to celebrate. slovakia ’ s economic achievements on the way towards euro adoption slovakia has made remarkable progress in both nominal and real convergence. this has been reflected in a decline in inflation and a significant economic growth record. slovakia ’ s performance is based on the firm foundations of a bold economic reform programme implemented earlier this decade. cooperation between the ecb and narodna banka slovenska on the side of central banks, this historic moment has been prepared through a very close cooperation over the last couple of years between the european central bank and narodna banka slovenska under the leadership of governor sramko. this cooperation has laid the groundwork for the smooth and successful introduction of the euro in slovakia. the sustainability of convergence the introduction of the euro in slovakia will further enhance the benefits of the single market. the euro removes exchange rate uncertainty between slovakia and many of its most important trading partners, integrates the country into one of the world ’ s largest economies and helps to shield it from some of the effects of the international financial turbulence. it is also important to stress that the introduction of the euro must not give rise to complacency. in order to ensure that convergence is sustainable and that the slovak people can reap the full benefits of euro adoption, the slovak public authorities will need to pursue ambitious economic policies on all fronts. a rigorous and credible implementation of fiscal policy in line with the commitments of the stability and growth pact is particularly important. other policy measures would need to focus on slovakia

ensuring an orderly process of adjustment. the risk at this time is that market forces and expectation can lead to a disorderly movement. hence, foreign exchange intervention remains a viable option to guide an orderly adjustment. at the same time, to ensure no disruption to the financing of the us deficits, there may be a need to consider broadening the scope of investing in us assets especially the physical assets. this is to ensure continued interest in us assets at a time when some segments of us financial assets may be less appealing than before on account of the ongoing stress in the credit market. but in the longer - term, we need to look at this process of adjustment from a global perspective and the key to the issue would be to rebuild a stronger domestic demand growth outside the us. doing so would require stimulating public investment in infrastructure especially in asia, as well as continuing with the financial reform to support private investment and credit expansion. and finally, greater flexibilities in prices will also go a long way in promoting an efficient resource allocation. all these points are not new, but they are a good reminder of what needs to be done. since, our theme today is on the new trends in reserves management, let me end my remarks with a few points on reserves management and financial markets. reserves management is essentially the flip side of reserves accumulation. in terms of the stock of reserves, notwithstanding a successful adjustment in the global imbalance, the relative importance of countries, as measured by their reserves positions, is unlikely to change significantly in a foreseeable future from the position we are in today. this is because reserves accumulation to date reflects successive years of external surpluses rather than borrowed reserves. going forward, productivity improvement and continued careful policy management by emerging markets will help maintain this relative position. therefore, for some or for most countries, the regime shift that we are seeing now may be more of a permanent feature. so, the world is now different, and this change needs to be recognized more fully by the market. more importantly, the configuration of policies at the international level, especially by the bretton woods institutions, also need to adapt to this shift. on reserves management, the size of reserves that we have now in emerging markets, the fiscal costs associated with reserves accumulation, and the opportunity cost of investing excess reserves, all these may induce reserves managers to explore opportunities for enhancing returns by adopting more aggressive investment policies. such actions will undoubtedly affect financial markets. on this, it is important to remind ourselves