The building of Europe is a significant development in post-war European history. The European Monetary Union will be one of the most momentous steps in this process since it marks an irreversible aspect of the concept in more ways than one. Equipped with a single currency and responsible for maintaining overall financial stability as a common task, Europe is about to enter a new phase in its history.

The single currency will mean a veritable revolution for Europe. The economy will be affected on all levels: ordinary citizens, since the national currencies will disappear; enterprises, since they will operate in a new environment of stability and transparency; and, finally, the authorities, since they will manage common affairs in a field in which the different national characteristics will nevertheless remain important.

In Switzerland, the launch of the euro will bring a profound change of environment. For the first time in our history, we will be surrounded by a unified monetary zone. This is an advantage from the point of view of transparency and payment transactions, but it also entails certain risks. The question that primarily occupies Swiss exporters concerns the future stability of the link between the Swiss franc and the euro.

Confidence in this respect is justified because experience shows that countries pursuing similar macro-economic objectives and exhibiting comparable economic development benefit from relatively stable exchange rates. With Switzerland's growing integration in the European economy and the convergence of objectives of the European Central Bank and the Swiss National Bank, the chances for stable conditions are good. Any attempt to eliminate all exchange rate risks by linking the Swiss franc to a European standard would nevertheless be a precipitate decision. A pegging of our currency could fuel speculation or trigger a rapid increase in interest rates in Switzerland, which in turn would hamper the economic recovery currently under way.

Exchange rate flexibility is thus a response to the uncertainty of the moment. Once the euro is perceived to be a stable currency by the markets, Swiss and European interest rates will converge progressively, and this, in the long term, will create favourable conditions for Switzerland's monetary integration in the European Union.