Moreover, the pace of internationalisation of the euro area economy has been further spurred by the euro. Allow me to give just one example: the level of accumulated foreign direct investment abroad by French residents since 1999 amounted to EUR 380 billion (i.e. four times its pre-1999 level). Indeed, capital flows between the Euro area and the rest of the world mirror a high degree of attractiveness: over the years 1999-2001, the Euro area has registered total inward direct investments worth 719.8 billion Euros. At this point, one may wonder which conditions are required to ensure the success of the euro and EMU in the medium term. I believe that we have to tackle three main challenges: structural reforms, financial stability and the accession to the EU of new Member States. ***  BIS Review 11/2003  5  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 to achieve enhanced co-ordination. The Lisbon European Council, held in March 2000, further enhanced the medium-term strategy to introduce structural reforms in the Union.
Jean-Claude Trichet: The European Monetary Union and the euro Speech by Mr Jean-Claude Trichet, Governor of the Bank of France, at the Financial Forum 2003, organised by The Wall Street Journal Europe and The New Economy Forum, Madrid, 25 February 2003. *  *  *  Ladies and gentlemen, it is a great pleasure and an honour to be with you today, on the occasion of the “Financial Forum 2003”, organised by the New Economy Forum and the Wall Street Journal Europe. I would like to present my views on the successful set-up of the euro, on the economic and financial integration of Europe and on the challenges that the euro-zone will confront going forward. The Euro: built on a successful set up Set-up of the Eurosystem The single monetary policy is formulated and implemented within a sound institutional framework, the Eurosystem, comprising the European Central Bank and the twelve national central banks of the euro area. Three principles underpin the Eurosystem: independence, transparency and decentralisation. The independence of both the European Central Bank and national central banks is enshrined in the Treaty. When exercising their powers and carrying out their tasks and duties, neither the central banks of the Eurosystem nor any member of its decision making bodies shall seek or take instructions from Community institutions, from any government of a Member State or from any other body. Independence refers to institutional, operational and financial independence.