Nevertheless, the Thai banking system will be able to handle these challenges given a strong capital base as a result of continued profitability in the past ten years, a good risk management system, and strong risk-based supervision. Therefore, Thailand’s key fundamentals remain resilient in the face of these challenges. Most importantly, human resources and know-how remain intact. History shows that no matter how severe the natural disaster, roads can always be rebuilt and buildings restored in a relatively brief span of time should the human spirit remain, as it does in Thailand. The growth rates I have mentioned for 2012 and 2013 are consistent with the medium-term trend, as strong fundamentals mean that Thailand’s long-term growth trajectory remains intact despite the flood and volatile external environment. An important reason for this is  BIS central bankers’ speeches  1  that Thailand is well positioned geographically to reap the benefits of growth in Asia. The rise of China and the ASEAN Economic Community (AEC) provide enormous growth opportunities from economic integration. For sure, there will be more competition. But our research shows that trade gains will be substantial, from both inside and outside the region. However, there is a catch. To reap these gains, the Thai economy will have to undergo structural adjustment, that is, the flow of labor and capital from sunset to sunrise sectors. The exact form of adjustment is uncertain, as it depends on global developments.
It is just as important to avoid an inflation rate that is too low, as it is to avoid an inflation rate that is too high. Economic policy in the euro area The introduction of the euro on 1 January 1999 also meant the introduction of a single monetary policy in the eleven member countries. Greece joined as the twelfth country on 1 January 2001. The population of the euro area is a little more than 300 million and the euro area economy accounted for about 16 per cent of world GDP last year.1 Price stability is the primary objective of the single monetary policy in the euro area. The Governing Council of the European Central Bank has defined price stability as a year-on-year increase in the Harmonised Index of Consumer Prices (HICP) for the euro area of below 2 per cent. The project will be completed in January and February 2002. On 1 January, euro banknotes and coins will be put into circulation. During a changeover period, national currencies can be used as a means of payment alongside the euro. This period is no longer than two months in any of the member countries. As from the beginning of March, the euro will be the only legal tender in all euro area countries, and all prices will be in euros. The objective of monetary policy in the euro area is price stability in the euro area as a whole.