the eurosystem does not pursue the internationalisation of the euro as an independent policy goal : this implies that it neither fosters nor hinders this process. it does not mean that the international dimension is irrelevant for the eurosystem. of course, we take into account potential spillover effects on monetary policy. however, the impact of the internationalisation of the euro on monetary policy should not be over - stressed, as the eurosystem ’ s monetary policy is sufficiently robust to take into account and accommodate its potential implications. at this point, one may ask what conditions are required to complete the success of the euro and emu in the medium term. in my opinion, the metaphor of rugby is appropriate : by introducing banknotes and coins in euro, we have scored a try. now, we must convert our gains. i believe that we have to deal with three main challenges : structural reforms, financial stability and the accession to the eu of new member states. * * * the challenges ahead structural reforms the first challenge is beyond dispute to implement structural reforms in the euro area ’ s economies. structural reforms were crystallised at the european level in what is called the lisbon strategy. the first objective of this strategy is to substantially raise our potential output growth. the second is to make our economies more competitive. implementing the reforms : the lisbon strategy the european council meeting held in luxembourg in december 1997 explicitly mentioned structural policies among the items selected for strengthened co - ordination. the lisbon european council, held in march 2000, further enhanced the medium - term strategy to introduce structural reforms in the union. this strategy aims at making the european union the world ’ s most dynamic knowledge economy by 2010. it has since been rounded out to include social issues ( at the council of nice ) and environmental issues ( at the council of gothenburg ). work to date in the field of structural reforms is quite encouraging. noticeable successes have already been registered with regard to certain policies, such as new rules in telecommunications, electricity and gas markets. before reviewing the priority areas where fresh impetus is required, i wish to briefly make two remarks : first, the responsibility for structural reforms in the european union rests with the individual member states. consequently, there is a wide variety of institutional solutions and regulatory arrangements across countries and sectors. i nevertheless consider that such a decentralised approach should be considered as an opportunity, rather than a disadvantage. it encourages " cross fertilisation " of best practices through increased co - ordination of member states

’ confidence in the new currency. this was not the case four or five years ago, before the setting up of the euro, when financial markets were convinced that the euro would be the weighted arithmetic mean of its legacy currencies and would not inherit the level of confidence and credibility of the strongest of these, such as the deutsche mark, the dutch guilder, or the french franc. the euro has actually been founded on a benchmarking principle, not on a convergence towards an average. that may explain why the euro ’ s interest rates were the lowest in europe from the outset. successful technical framework however, even the best monetary strategy needs an efficient technical framework. the launch of the euro on the financial markets, on 1 january 1999, has also been an indisputable success from a technical point of view. in this respect, three points are worth mentioning : · the monetary policy framework contains a wide set of instruments chosen with a view to observing the principles of market orientation, equal treatment, simplicity, and transparency. the decentralisation of the operations of national central banks has undoubtedly contributed to the smooth functioning of the framework. maintaining a close contact between commercial banks and their national central banks has helped the financial markets to quickly adopt the harmonised practices relating to open market operations, eligible collateral for credit operations and minimum reserve systems. · operational efficiency is highlighted by the precise adjustment of banking liquidity and effective steering of short - term interest rates ; the eurosystem has demonstrated this th efficiency, in the days after the tragic events of 11 september 2001, by acting quickly and by ensuring a smooth and orderly functioning of the european financial markets. · security is provided by the procedures and systems implemented, both for the execution of interbank transactions, and vis - a - vis large - value payments. the inter - bank market became integrated thanks to the setting up of the target system for the real - time transfer of largevalue payments throughout the euro area and in other eu countries. let me turn now to the introduction of euro banknotes and coins, which has been the last step of a now more - than - twenty - year process of monetary integration. the euro changeover on 1 january 2002, the euro banknotes and coins were issued and became legal tender in the countries participating in the euro area. this is a unique and highly symbolic event for europe. as regard france, the early changeover of non - cash payments in 2001, and the rapid introduction of banknotes and coins