•  Firstly, nominal convergence, which is requested in order to adopt the euro, must be sustainable and therefore constitutes a medium-term objective, rather than a short-term priority. Indeed, the EU Treaty calls, as a prerequisite for adopting the euro, for a high degree of sustainable convergence in the fields of price stability, government fiscal position, stability of the exchange rate, and long-term interest-rate levels. Therefore, nominal and real convergence should be pursued in parallel, and are not antagonistic, in the interest of both accessing countries and the euro area. •  Secondly, I note that many accession countries have already expressed their intention to join ERM II as soon as possible after EU entry. This intention is to be welcomed. However, it should be clear that the ERM II is not expected to be adopted by new members immediately after EU accession, nor is intended to be limited to only two years, which is the minimum period of time prior to adopting the euro. It would be misleading to consider ERM II as a mere “waiting room” before euro. On the very contrary, ERM II is to be considered as a “training room”. This mechanism will allow countries to retain some limited exchange rate flexibility during the catching-up process.
In light of recent developments, I am optimistic about the economic prospects for the Bronx and local small businesses. I also believe that community banks and community development organizations have an important role to play in paving the way forward. As always, my comments today reflect my own views and not necessarily those of the Federal Open Market Committee or the Federal Reserve System. 1 The economic outlook for the Bronx To appreciate where we are, we need to remember where we’ve been. Those of you who are long-time Bronxites know that starting in the 1950s, but especially during the 1970s, the Bronx endured a massive economic slump. In that one decade, the 1970s, the borough’s population fell by 20 percent – and by even more in many well-established neighborhoods. As people moved out in droves, buildings were abandoned, crime increased and jobs vanished – all in a vicious cycle, creating an atmosphere of despair. Yet, the borough persevered and conditions began to stabilize and then to even improve a bit in the 1980s. Today, while there is still much progress to be made, the Bronx is in dramatically better shape on many dimensions: its economy has been growing at a brisk pace, its population is on the rise, its housing stock is being rejuvenated and many businesses are thriving, creating strong job and income growth. This is particularly evident in neighborhoods like Hunts Point and the area around Yankee Stadium, down to the Bronx Terminal Market and beyond.