Prince Henri Auditoire 02 BW

Inauguration Ceremony of the Banque centrale du Luxembourg - Yves Mersch

Luxembourg, le 18 mai 2001

Seule la parole prononcée fait foi.

Your Royal Highness,

The Luxembourg dynasty has played a pivotal role in the emergence of our nation. This has allowed us, in return, to affirm the institutions of our State, paradoxically enough through Luxembourg's participation in the building of Europe. The presence of our monarch, the new Head of the Luxembourg State, at the inauguration of our Bank, a new Luxembourg institution, gives me the opportunity to express to you publicly our gratitude.

Our sovereign signs the basic law of our Bank, appoints the members of our Board; it is to him that the Bank's staff swears fidelity.

Our Bank has the privilege to be established on the basis of the European Treaties, by means of an act of Parliament.

In monetary matters, this new institution exercises part of the power of the executive, quite independently from that part of the power of the executive for which your Government is responsible.

At the same time, this element of sovereignty is pooled at the European level.

Your Royal Highness,

In the tradition of those who built our nation, your father and yourself have consistently supported the Banque centrale du Luxembourg.

Please be assured of our deep devotion and our continuing faithfulness.


Mr. President of the European Central Bank,

Mr. Prime Minister,

Your Excellencies,

Dear Colleagues,

Ladies and Gentlemen,

A new institution owes its existence not only to certain historical circumstances, but also to decisions made by statesmen at the critical moment. I feel honoured to recall some of those decisions and those who took them.

I wish to express my appreciation first to Mr. Pierre Werner, who, when he was Prime Minister, hoped and worked for the creation of a Central Bank for Luxembourg. But the time was not ripe. When the BCL was at last created, Mr. Werner was an immensely supportive member of the Board.

In the coalition Government, led by Mr. Jacques Santer and Mr. Jacques Poos, Mr. Jean-Claude Juncker, as Minister of Finance, had the responsibility of negotiating the Maastricht Treaty. When, as his personal representative, I suggested to him that the creation of a Central Bank of Luxembourg be included in the Treaty he agreed and successfully supported the idea in the Council of Ministers.

I would like to thank Mr. Philippe Maystadt who at that time, as Belgian Minister of Finance, overruled some possible objections within the delegation of his country in the Belgian /Luxembourg Monetary Association. He supported the draft that had been put forward by the then Dutch Treasurer General Cees Maas under the Dutch Minister of Finance of the day, Mr. Wim Kok.

To some extent one could say that the BCL is a European child of Benelux parentage.

Inside the community of Central Banks, our young institution has been welcomed with great sympathy. I would like to thank all my colleagues of the Governing Council of the Eurosystem who have provided a helping hand with advice, support and traineeships. The presence of many of them together with other European Governors from inside and outside the European Union is greatly encouraging.

I wish to pay a special tribute to Mr. Wim Duisenberg. He has managed very successfully the dual challenge of being both the first President of the European Central Bank and also of the entire European System of Central Banks.

Let me also thank the Deputy Prime Minister and Minister of Foreign Affairs, Mrs. Lydie Polfer, who in her former capacity as mayor of the City of Luxembourg authorised the transformation of our premises. We enjoy similar support from her successor, Mr. Paul Helminger.

May I also mention the achievement of the architects and the team of workers surrounding them for their constant struggle over 3 years which successfully respected the budget and the time-table.

I wish, finally, to express my gratitude to those who appointed my two outstanding colleagues, Mrs. Andrée Billon and Mr. Serge Kolb, for giving us the pleasure of working with a totally committed young staff, which is competent, enthusiastic and motivated.

The new area of monetary policy operations out of Luxembourg befitted the collateral rich balance sheets of numerous banks operating out of Luxembourg. The BCL is thus an anchor for certain financial activities of the financial centre.

Transborder payments operated by the BCL are also developing at a rapid pace due to high standards of availability, reliability and competitive services associated with relative prices on the decrease.

Apart from financial services, the BCL has sharpened the institutional profile of the country. Release calendars of macroeconomic or public finance data were either non-existent or went unchecked inside the country. According to feedback from the EC, the OECD and the IMF, quality control has improved. Frequency and availability of information has improved since our team has started to check and track data that often went unnoticed at the domestic level. A friendly competition of excellence and professionalism with other national institutions is deepening in order to keep pace with international standards. This creates the level ground for a better public choice in general and in particular policy-making based on real evidence.

The work of the BCL helps to provide us, in Luxembourg, with a clearer understanding of our role in the future of European integration. It is one more link in the overall chain of the process of Europeanintegration in which Luxembourg intends to be a full and omnipresent partner. We may be small but we are determined and we drive hard.

Before giving the floor to the President of the European Central Bank and to the Prime Minister of Luxembourg, let me end by quoting from Schumpeter's book, "The essence of money": "Monetary policy means more than the formulation, influencing and regulation of a special field of a market economy. The often emotional and invariably enormous interest concerning practical aspects of the monetary system and the value of money, is only to be explained by the fact that everything a people wants, does, suffers is represented in its monetary system. At the same time, also, a significant influence on a people's economy and destiny arises from its country's monetary system. The health of a people's monetary system is symptomatic of its overall health ... Nothing tells us more clearly out of what wood a people is carved than how it conducts its monetary policy."