##preciation of the exchange rate of the euro. in addition, the three - month average of annual m3 growth followed a gradually rising path, approaching 6. 0 % as from the summer of 1999. in conjunction with strong growth of credit to the private sector, at annual rates of around 10 %, this indicated that liquidity was ample in the euro area. against this background, there was a greater risk that the rise in import prices could trigger lasting effects on inflation and have an adverse impact on the outlook for price stability in the medium term. the governing council has responded to these upward risks to price stability over recent months, with three successive increases in the ecb interest rates, which were effected in november 1999, and in february and march 2000. as a result of these increases, the main refinancing rate now stands at 3. 50 %, while the rates on the marginal lending facility and on the deposit facility have reached 2. 50 % and 4. 50 % respectively. these decisions were taken in order to contain the risks to price stability in a timely and pre - emptive manner. in this way, they have also contributed to the achievement of sustainable, non - inflationary economic growth in the euro area. at present, the outlook for growth in the euro area is better than it has been for years. this positive outlook can be largely attributed to the convergence process in the run - up to stage three of emu, as reflected in stable prices, a clear improvement in the public finance situation and a low level of interest rates in the euro area. however, the exchange rate of the euro does not reflect the ongoing improvement in the domestic fundamentals of the euro area economy. the depreciation of the euro in nominal effective terms over the last months will, until reversed, put upward pressure on import prices and continue to affect the risks to price stability. developments in the exchange rate of the euro thus remain a concern with regard to future price stability. in addition, recent monetary and credit developments confirm that liquidity in the euro area remains ample. in the light of the favourable prospects for economic growth, the impact of these developments on inflationary pressures is being monitored closely. the eurosystem will remain vigilant in assessing upside risks to price stability. it is in the interest of the whole community that, as and when required, the eurosystem acts in a timely manner to maintain a positive outlook for price stability and, in this way, to support lasting non

joined our countries is more than just living under the same roof, it is about sharing a common vision and about managing life together. this is why we are witnessing, in parallel to the establishment of monetary union, a move towards deeper political integration. over the past decade, the political and constitutional edifice of the union has resembled an almost perennial construction site. today, the eu is faced with the challenge of devising a viable, transparent and democratic structure for a political community that encompasses almost our entire continent, a union that is capable of meeting the expectations of its citizens and is equipped to assume international responsibility commensurate with its size and importance. the convention on the future of europe is debating these issues, reflecting on what can be best achieved through central institutions and common rules, and what should instead be left to the member states. the mandate of the convention, as laid down by the heads of state or government, is a broad one, and the outcome of the process could be a european constitutional treaty, or even a european constitution. we should realise, however, that we have already achieved a lot, particularly in the field of monetary integration. but for this constitutional process to succeed, europe has to become more tangible, something that inspires a true sentiment of togetherness, not only among policy - makers, but also and especially among the citizens of europe. with the introduction of the euro, we have taken a big step in this direction. one of the most powerful symbols of a common identity, money, is now shared by 12 european countries. in this sense, " the euro, our money " can provide a new and even more solid basis for the eu to discuss its finalite politique, the ultimate destination of its continuous process of building an " ever closer union ". ladies and gentlemen, i look forward to a fruitful, informed and hopefully enlightening debate. thank you very much for your attention.