Due to its economic integration with the EMU countries, Switzerland will be faced with a particular challenge when the euro is introduced. The exchange rate is a key factor for the open Swiss economy. Exchange rate fluctuations and a potential upward trend of the Swiss franc are two of the phenomena with which monetary policy - largely autonomous since 1973 - has had to contend. Inseparably linked with this are the Swiss interest rate bonus and the low average inflation rate in an international comparison.

What changes will the euro usher in? Can and should the established policy be continued? The answer is a twofold yes. The alternative - pegging the Swiss franc unilaterally to the euro - discussed in some quarters is no viable solution. The basic concept and the instruments of our monetary policy are not made obsolete by the introduction of the euro.

Switzerland's accession to the EMU is not regarded as a genuine option by the SNB. This step would follow if Switzerland were to join the EU, a decision which would have to be put to the vote and be passed by both the Swiss people and the cantons. The economic consequences of EU membership would first have to be carefully analysed and dicussed on a broad front.

There is no promising alternative to pursuing our own monetary policy course in the near future. Monetary policy can be implemented so as to take account of the necessary changes that will result from the introduction of the euro.