Reasons to be optimistic regarding the long-term prospects of the euro area Let me now explain why I am rather optimistic regarding the future development of the euro area economy. The euro area is already highly integrated in economic terms owing to the creation of the single currency and Single Market and further progress in this respect is ongoing. This is a good starting point for dynamic economic development. My optimism is grounded in particular on the transformation we have witnessed over the past years, following the remarkable decision in favour of the Single Market. The successful establishment of the euro and the ECB, which together with the Single Market, have created a new economic entity, is evidence of the ability of Europe to implement far-reaching reforms which are well-designed and underpinned by solid institutional structures. This creation of an entirely new economic entity is a substantial step forward. The euro will act as a catalyst for further reform in many areas. My optimism is further underpinned by the fact that the Treaty sets out a durable anchor to guide economic decisions and to reduce economic uncertainty substantially by entrusting an independent institution, the ECB, with a clear mandate of maintaining price stability.
From an economic point of view, the relevant question is whether the political and institutional framework which governs the euro area is designed in such a way as to ensure bright long-term prospects for the euro area in terms of employment, real growth and, more generally, living standards of its citizens? In this respect, while I see an urgent need for further structural reforms in the euro area, let me emphasise at the outset that I am rather optimistic as concerns the long-term growth and employment prospects of the euro area. Not least as the euro, together with healthy competition among differing policy designs of national authorities, will act as a catalyst for further reform and integration. In my presentation today, I will first briefly address the political and institutional structure underlying the euro area. Secondly, I will discuss some features of the ECB, the institution responsible for an area in which full integration has been achieved, namely monetary policy. Thirdly, I will discuss some of the challenges which need to be addressed to fully grasp the opportunities offered by the single currency, thereby further improving the economic prospects of the euro area. Finally, I shall argue that the unique institutional choice for the euro area brings many advantages and opportunities and thus, if properly handled and carefully further developed, is a very solid fundament for a substantially more dynamic long-term development of the euro area than most observers currently appear to expect.