News Brief No. 99/1

News Brief: Camdessus Welcomes the Successful Launch of the Euro

January 6, 1999

Michel Camdessus, the Managing Director of the International Monetary Fund (IMF), made the following statement to the Executive Board of the IMF today:

"I would like to begin this, my first meeting of 1999, by welcoming the successful launch of the euro. This is an historic event--for Europe and for the international monetary system. I would like to congratulate our European colleagues on this collective achievement. Let me share some thoughts with you from the twin perspectives of Europe and the international monetary system.

"First, the launch itself has been strikingly smooth. This is testament, indeed, to the vision, professionalism, and dedication of all those involved at both the EU and national levels. It has also been a model of cooperation and partnership between public and private sectors.

"The foundation for this success has, of course, been created by the impressive strengthening of macroeconomic policies in Europe in recent years. In crafting and implementing its monetary policy, the European System of Central Banks (ESCB) will be able to capitalize on the hard-won credibility earned by its member central banks. No less important is the stability-oriented framework established by the Maastricht Treaty and the Stability and Growth Pact. These augur well for a euro that will command confidence.

"EMU is a milestone in European economic integration and the capstone of decades of effort to establish--this time irrevocably--exchange rate stability within continental Europe. But challenges remain to be addressed if EMU is to realize its full promise. In the fiscal area, the task of bringing budgets intobalance or small surplus is not yet complete. However, it is in structural reform that the greatest strides now need to be made. Improving the working of labor and product markets, reforming public spending programs and lightening the burden of taxation--these are the key to realizing Europe’s full potential for lasting job creation and growth.

"A successful EMU holds great promise for the world economy. It can play a key role in fostering an open and stable international economic system. Moreover, it will bring a broader and deeper European capital market offering new opportunities to savers and borrowers the world over. The launch of the euro also offers new scope for global cooperation. We at the IMF look forward to playing a full part in this process--in our surveillance of euro area policies and more generally in providing a forum in which the members of the euro area and their international partners can work together in the interest of a well functioning international monetary system--surely the key purpose of the IMF," Camdessus concluded.

The IMF’s Executive Board noted the historic character of the event and endorsed the views expressed by the Managing Director.