Inflation expectations themselves have been remarkably stable, including during the recent period when oil prices jumped to levels no one could have expected only a year ago. This, by itself, illustrates the credibility achieved by the Eurosystem, after only six years of existence. Second, European households and companies are reaping the benefits of that credibility. Long term interest rates stand at an historically low level, around 100 basis points below the level in the United States. So, even after the recent increases in short term rates, monetary and financial conditions remain extremely favourable for investment and growth. And indeed, we might be witnessing in Europe the start of period of sustained and stable growth, at least if current projections and surveys prove to be right in the coming months. A third benefit of the Euro is the boost it gives to financial integration in Europe. In many segments, European financial markets have reached the depth and liquidity which, up to now, were the preserve of dollar markets. This stimulates productive investment, helps in restructuring (as witnessed by the current wave of M&As) and, more generally, allows a better allocation of savings and sharing of risks. As a consequence, the euro is becoming extremely attractive, as a vehicle, a transaction, an investment and a reserve currency. As you may know, as central bankers, we remain neutral as far as the internationalisation of the euro is concerned. We are neither encouraging, nor discouraging the process.
Christian Noyer: Is the euro a success story? Speech by Mr Christian Noyer, Governor of the Bank of France, at the Paris EUROPLACE International Forum, Tokyo, 29 November 2006. *  *  *  It is a great pleasure for me to be here today and to have the opportunity to address such a distinguished audience. I want to talk to you about a success story: the euro. As you well know, there have been difficult times for European integration. The Treaty creating a Constitution for Europe was not ratified last year and the future of political integration is fraught with uncertainties. Also, much remains to be done, in terms of structural reform, if the European countries want to achieve the same level of long term growth as other developed economies. Nevertheless, I feel very optimistic. And the reason for this optimism is the euro. The single currency has the potential to bring enormous benefits to European nations, which they can use to achieve a high degree of stability and prosperity. 1)  What are those benefits? The first, and most obvious, is price stability. Over the last five years, inflation has stayed broadly in line with the price stability objective set by the European Central Bank, i.e. inflation below but close to 2% over the medium-term. Gone are the days when European citizens had to worry about the purchasing power of their savings. This stability goes beyond the behaviour of prices.