EMU and the Role of the National Central Banks in the Eurosystem

It is a pleasure to be with you tonight here at Davidson. I have counted a number of Davidson alumni as good friends and colleagues over the years, but for some reason this is the first opportunity I have had to visit the Davidson campus. I am happy to have the chance to do so this evening even though I have to make a speech to earn it! As the new millennium approaches, a significant part of Europe has embarked on a bold monetary voyage. This voyage could help determine the course of Europe's economy and the success or failure of its efforts at greater political cooperation and political integration in the 21st century. The new European Monetary Union (EMU); its institutions known collectively as the Eurosystem, which include a new European Central Bank (ECB) and the national central banks (NCB) of the 11 member countries; and its new currency, the Euro, have all been launched successfully. Whatever the outcome of this initiative, there can be no doubt that EMU represents a major milestone in the long journey toward greater economic, social, and political integration that began with the establishment of the European Payments Union in 1950 and the European Coal and Steel Community in 1951. Speaking from the perspective of one who studied the early pan-European movement at the University of Strasbourg in France in 1961 and 1962, EMU seems genuinely extraordinary, even though it has taken nearly 40 years to achieve it.