As a consequence, the euro is becoming extremely attractive, as a vehicle, a transaction, an investment and a reserve currency. As you may know, as central bankers, we remain neutral as far as the internationalisation of the euro is concerned. We are neither encouraging, nor discouraging the process. But, as a citizen, I cannot help and feel proud of having one the two main currencies in the world. Long term prospects Looking into the future, I would like to try and answer four questions: is monetary integration sustainable in the long run? What are the prospects for the enlargement of the euro area? Can the euro serve as a model for other regions in the world? And finally, is monetary union going to lead to further political integration in Europe? Solidity of the euro area I am aware that there still is, on this side of the Atlantic, a lot of skepticism about the future for the euro. Four years ago, one of your leading academics, (Martin Feldstein) wrote a piece in Foreign Affairs arguing that monetary union would reignite conflicts and war in Europe. This is, of course, the extreme form of a basic argument: that there are too many divergences between European states for them to withstand the pressures of monetary unification. Put in simple economic terms, it boils down to the argument that the euro is not an optimum currency area. In my view, this is less and less true.
And the reason for this optimism is the euro. The single currency has the potential to bring enormous benefits to European nations, which they can use to achieve a high degree of stability and prosperity, in the interest of all countries in the world. 4  BIS Review 43/2007