Personally, I also think that the Nordic countries could provide a fruitful joint contribution to the long-term success of Monetary Union. There is no need to overemphasise the role of small countries in this process, but it is clear that co-ordinated views by a group of small countries would have a larger influence than the views of individual countries. One of the benefits of the Nordic countries - and small countries in general - is that they are seldom bound to their old traditional system. In contrast, they typically fight for efficient solutions which would be in the interest of the whole of the euro area.
If I now live in Frankfurt and am here today it is because most of my professional life was spent in an institution - the Banca d'Italia - where eminent persons like Guido Carli, Paolo Baffi and Carlo Azeglio Ciampi allowed the dilemma of my early years being kept somewhat unresolved and favoured independent analysis as a complement of practical activity. They also shared and encouraged the combination of enquiry and action that helped the euro to become a reality. To them I therefore dedicate this lecture.
Economists have explored the scope for economic policy action, and the limits thereof, in the monetary, fiscal and regulatory fields. Without thirty years of academic debate about the role of monetary policy, the EMU Treaty and the Statute of the ESCB/ECB would not have been written the way they were. The subordination of economic policies to the principle of "an open market economy with free competition" would not have been explicitly inserted in the Maastricht Treaty (Article 3A) had those principles not gained recognition in the community of scholars.
The entry of these countries would result in a monetary area of 376 million inhabitants, 39 % larger than the United States and almost triple the size of Japan, with a GDP of EUR 7,495 billion, only slightly less than that of the United States and 125 % higher than that of Japan.
The euro, the Eurosystem's monetary policy and, in general, the activity of the ECB and the Eurosystem will play a key role in the integration of European financial markets and all markets in general. We can say that the euro will act as a catalyst for European economic integration.
In the field of central banking the public interest is to provide economic activity with a medium of exchange that preserves its value over time. In the broader field of economic policy - of which monetary policy is part - the public interest is, to use words from the Maastricht Treaty that can be similarly found in most national constitutions and legislation, "to promote economic and social progress which is balanced and sustainable" (Article B). In the field of European integration, the mission is that of "creating an ever closer union among the people of Europe, in which decisions are taken as closely as possible to the citizen" (Article A). Finally, in the field of international relations the public interest is to "maintain international peace and security" (UN Charter Article as well as to "contribute to the promotion and maintenance of high level of employment and real income" (Articles of Agreement of the IMF, Article ii).
If Denmark already is following "the rules of the game", why, then, should you not make use of the advantages of belonging to the Eurosystem ? Why, then, should you not participate in the decisions concerning the monetary policy which, in actual fact, applies to Denmark ?
Economic integration Monetary and financial integration stemming from the euro and the activity of the Eurosystem will affect the operation of the European single market in a positive way. The European market, with a single currency, will tend to be more transparent, more competitive, more efficient and will function more smoothly. This is the reason why joining the European Union, as a general rule, leads to joining the euro area, once certain economic conditions (the so-called convergence criteria) are fulfilled.
The Nordic countries have chosen to organise their monetary policy ties to the euro area in very different ways : Finland is the only Nordic country taking part in Monetary Union as from the start of Stage Three; Denmark negotiated an opt-out from Monetary Union but follows a fixed exchange rate policy vis-et-vis the euro within the new Exchange Rate Mechanism (ERM II); Sweden decided not to participate in Monetary Union from the start of Stage Three, without having a formal opt-out and the Swedish krona still floats freely against the euro; and Norway and Iceland remain outside the EU altogether.