But, from what I gather as an observer from afar, there are a number of other factors, less tangible, which also contribute to that scepticism. I shall go through some of them with you, noting once again that perception from many miles away may indeed be quite different from reality. The first factor concerns structural rigidities, which appear to observers from my side of the world to be more serious in Euroland than in many other economies, big and small. The severity of these structural rigidities is seen to be undermining the ability and the efficiency with which Euroland can respond to change. Of course, we recognise that some loss of adaptability may be the price that has to be paid for a relatively stable society and a comfortable social safety net, and that the trade-off has effectively been arrived at through a democratic process. But it is hard to believe, as an outsider, that the trade-off is an optimal one. I cannot imagine, for example, what goal of social stability could justify labour market and social security arrangements that deliver an unemployment rate of double digits; or contribute to delaying, if not preventing, the arrival of the “new economy” in Euroland. I understand that some still do not believe that there can be a new economy, in which the technological revolution enables productivity gains that are capable of sustaining a much higher rate of non-inflationary growth. Of course, we should always question and critically examine any unusual phenomena, rather than embrace them blindly.
A good guess seems to be that the shorter the interval before participation, the quicker will be the changeover to euro. The world will not be the same The creation of a monetary union just outside Sweden's borders will change the world as we know it. Individuals and firms will both be affected by the euro's introduction whether we participate or not. In our efforts to keep the financial sector informed about EMU we can see that good progress has been made with the preparations. Among those concerned we also experience a strong desire to participate as early as possible so as not to get left behind. Swedish banks and other companies want to have a chance of competing on equal terms and do not wish to risk losing business opportunities. Finally I therefore wish to underscore that saying no to the single currency is not the same as status quo. As I said, the euro's introduction will affect us all, whether or not we participate. EMU will probably accelerate the globalisation, concentration and integration of the world's financial markets. It is therefore of the utmost importance that we all do what we can to find out more about these complex matters. BIS Review 41/1997