Against the background of this centralised decision-making structure, the role of the 11 national central banks consists mainly of the practical implementation of monetary policy and other tasks of the Eurosystem, such as the issuance of banknotes, the collection of monetary statistics or the operation of the Eurosystem’s payment systems. The fact that these tasks have to be carried out on the basis of agreed rules and specific instructions given by the decision-making bodies of the ECB, however, by no means lessens the importance of the national central banks in the overall set-up of the Eurosystem. *** Another particular characteristic of EMU is that, while Monetary Union has led to the introduction of a single monetary policy, Economic Union has not resulted in the development of other common macroeconomic policies, which instead remain in the hands of the national governments of the Union’s Member States. With a centralised monetary policy and decentralised fiscal and structural policies, the economic and monetary pillars of EMU can appear to be somewhat uneven at first glance. But we should not be fooled by appearances. In fact, the structure of EMU’s economic pillar reflects the need to strike an appropriate balance between providing flexibility and diversity, while - at the same time - ensuring that all of the economic policies of the euro area contribute to the success of EMU. Two factors have to be considered in this regard.
*** 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.