Before I address the benefits of EMU and the stability-oriented policies that have to be implemented to ensure that these benefits are achieved, let me briefly mention the main institutional bodies involved in the formulation and implementation of the single monetary policy. Monetary policy is determined by the Governing Council of the European Central Bank (ECB), which consists of the eleven governors of the national central banks (NCBs) of the participating Member States and the six members of the Executive Board of the ECB. The implementation of the single monetary policy is the responsibility of the Eurosystem, which is comprised of the ECB and the eleven NCBs of the participating Member States. The Executive Board of the ECB is a separate decision-making body. Its role is to ensure that the tasks conferred upon the European System of Central Banks (ESCB) are implemented, either through its own activities or through the NCBs. Economic growth - the benefits of EMU I should now like to address the benefits of EMU and why I believe that the introduction of the euro and the single monetary policy can result in higher economic growth in the euro area and thereby contribute positively to the development of the world economy. Of course, the degree to which these benefits are achieved depends not only on the monetary policy of the Eurosystem but even more so on accompanying stability-oriented fiscal policies and appropriate labour market policies.
It will be clear that this is not an easy process and monetary policy alone cannot achieve this. The full benefits of the single currency will come only if there is appropriate support from other stability-oriented policies, especially fiscal and labour market policies, and if structural reforms are carried out in these areas. Thus, price stability is a necessary, but not a sufficient condition for grasping all the opportunities of EMU. In this regard, it is of the utmost importance that the governments of the EU Member States continue to implement sound and stability-oriented fiscal policies, by which I mean policies aiming at the medium-term objective of a budgetary position close to balance or in surplus. As you will know, this condition is stipulated by the Stability and Growth Pact, which ensures the lasting compliance of fiscal policies with the requirement of budgetary prudence. From the perspective of a central banker, a prime reason for the establishment of the Pact was that a lack of fiscal discipline would negatively affect the ability of the Eurosystem to achieve its primary objective to maintain price stability. In this sense, the Stability and Growth Pact is one of the most important safeguards that will ensure that price and fiscal stability remains the cornerstone of EMU.