Recent events have given rise to some populist rhetoric about the wisdom of a single currency within Europe. A few commentators have posed the question: Why have a monetary union in Europe? My perspective is very different. I share the sentiment of my colleagues on the Governing Council who have dismissed as "absurd" speculation that the euro area's future has been thrown into doubt.
A single-size monetary policy has worked extremely well, delivering price stability so that changes in prices convey more effective information about demand and supply conditions. The credibility of the ECB's monetary policy has delivered interest rates that are at historically low levels to all member countries of the euro-area.