Mr Noyer discusses “the euro from A to Z”  Speech delivered by Mr Christian Noyer, Vice-President of the European Central Bank, at the European Union Centre, Sam Nunn School of International Affairs, Atlanta on 14 January 2000. *  *  *  It gives me great pleasure to speak to such a (young) audience about what is, after all, the world’s youngest and newest currency. As indicated by the title of my speech, I do not intend to enter into complex economic and political considerations concerning the pros and cons of the introduction of the euro under the specific economic and political conditions prevailing in Europe. Rather, I should like to provide you with a concise overview, from A to Z, of the main elements of the new institutional and operational framework under which monetary policy is being conducted in Europe following the introduction of the euro. Nonetheless, I do hope to be able to enhance your understanding of the euro, both in the broader context of European integration and in terms of the practical functioning and implications of Economic and Monetary Union (EMU) in Europe. In this context, you will see that there are some similarities between the institutional framework and conduct of monetary policy in the United States and in Europe. At the same time, there are also substantial differences, particularly with regard to the political and economic framework in which monetary policy has to operate on your side and our side of the Atlantic.
*** Talking with hindsight, after one year of experience since the successful launch of the euro on 1 January 1999, the most important challenge to the Eurosystem was the definition of the appropriate monetary policy for the euro area as a whole. In this respect, the Eurosystem had to navigate uncharted waters, since it could neither build upon practical experience with policies for the euro area as a whole nor on any reputation of its own, although it could draw upon the reputation and experience of the national central banks. In fact, apart from theoretical considerations and econometric test runs, we had - in that sense - to start right from scratch. The complexity of this challenge can easily be derived from the fact that the Eurosystem has to define a single monetary policy for a quite heterogeneous area that, as mentioned earlier, stretches from Lapland in the north of Europe to Andalusia in the very south. From a US point of view, this might not appear particularly demanding. The Federal Reserve System has always been confronted with the challenge of defining a single monetary policy for an even larger and likewise not fully homogeneous area. However, there seems to be a substantive difference. The US economy has evolved over decades, even centuries, under the conditions of the specific political set-up of the United States.