STORY OF THE WEEK: The ECB has achieved its ambition of replacing 12 national currencies with the euro. A bigger test will be to manage economies that are all at different stages.

MS Sirkka Hämäläinen is the most powerful woman influencing the future direction of the Irish economy.

The 62-year-old former governor of the Bank of Finland may not be a household name here, but her fingerprints are all over decisions such as the rate of interest we pay on our mortgages and bank loans and the strength of the euro.

Ms Hämäläinen is one of the permanent six-member executive board of the European Central Bank (ECB), and the only woman on the broader 18-member general council that steers and influences the 12 euro-zone economies.

Every fortnight she joins the other 17 members at the ECB Eurotower headquarters in Frankfurt to discuss what is best for the European economy and its 300 million citizens, who now share a common currency.

In the past three years Mrs Hämäläinen and her colleagues, which include Central Bank governor Mr Maurice O'Connell, have set interest rates as part of the one-size-fits-all economic policy that applies to the euro zone. These decisions are made independently of government influence and are based on the well-being of the entire European economy, rather than nationalistic concerns.

Although the Republic has an equal say in terms of voting on such key decisions, its voice at the council table could gradually fade to little more than a whisper. Enlargement of the EU in the future will swell the numbers on the council to around 30 - and almost certainly necessitate reform of the voting structures.

An ECB spokesman said that until the Nice Treaty is ratified, proposals for dealing with such an unwieldy body are not on the table. Options such as establishing a rotating list of voting members from Europe's central banks - to the establishment of a full-time executive committee - are likely to be considered. But as a small economy, currently representing just 1 per cent of the euro zone and even less of an enlarged European economy, the Republic's influence on economic policies we will have to live with is minimal.

Mr O'Connell has always strongly asserted that his role within the ECB is to work to formulate policy for the 12 member-states - with their needs always considered ahead of what is best for the Republic.

It is widely accepted that, had the Central Bank been running monetary policy here for the past three years, we would all be paying much higher mortgage rates. The bank would have had no appetite to cut interest rates in a booming economy for fear of fuelling inflation but, because the French and German economies needed such a stimulus, rates have tumbled.

The ECB president, Dutchman Mr Willem (Wim) Duisenberg, is viewed as lacking the moral authority of US Federal Reserve chairman Mr Alan Greenspan, but his comments, or the lack of them, are closely analysed by the markets and have a bearing on the fortunes of the euro.

Mr Duisenberg seized the reins in 1998 amid fierce opposition from French president Mr Jacques Chirac, who wanted his central bank chief, Mr Jean-Claude Trichet, to get the top job. After some considerable horse-trading, Mr Chirac insisted a "gentleman's agreement" had been brokered, through which Mr Duisenberg would make way for Mr Trichet half-way through his term. This would see the president stepping down during this summer. However, the agreement seems to hold little currency at the moment and recently Mr Duisenberg has insisted he is staying put, at least until he decides he wants to retire.

The Dutchman's intentions are something the French government wants to determine quickly as French council member and vice-president Mr Christian Noyer's term ends in May. It must decide whether to appoint another French candidate to the council to replace Mr Noyer, but this would bury its chances of filling the top job. Otherwise it could wait - but risk losing its seat on the executive board if Mr Duisenberg sits tight.

Mr Noyer joins Mr Duisenberg for a monthly press conference to offer an insight into what happens around the council table at the ECB's Frankfurt headquarters. They use vague central bank parlance that is copiously analysed by the media and the markets.

Mr Duisenberg has managed to convey to the currency markets that it is better to listen to his voice than other board members.

The other permanent members that make up the executive board are Spain's Mr Eugenio Domingo Solans, Italy's Mr Tommaso Padoa-Schioppa and ECB chief economist Mr Otmar Issing from Germany.

This week the six have all been very much on record, congratulating the member-states for successful conversion to the euro and making positive noises about the future strength of the currency. The wider governing body comprises the governors of the 12 eurozone states and includes influential figures such as Bundesbank president Mr Ernst Welteke and France's original choice for president, Mr Trichet.

Britain, Sweden and Denmark are also represented at the ECB, but abstain from voting on issues affecting the other 12 members.

Some analysts suggest that if Britain joins the euro it could be beneficial to the Republic's interests.

The Irish and British economies are more similar to each other than to many of the other EU states and will share many of the same concerns. The British would be able to command considerable influence within the ECB, representing an economy that is as large as Italy and France.

"The UK would certainly have an impact on the setting of interest rates. If it joins the euro it would also bring further benefits for Ireland as it would reduce the fluctuations associated with trading with the UK on the Irish economy," according to Bank of Ireland chief economist Dr Dan McLaughlin.

The ECB has largely achieved its greatest ambition in replacing 12 national currencies with the euro in a relatively seamless operation.

The success of the changeover has buoyed the value of the euro and instilled greater confidence in the 18-member council that is now running the euro zone economies.

A bigger test will be to manage 12 economies that are all at different stages in the economic cycle. Some are still growing, others are stagnant - and yet the same medicine will be administered to them all. So far the effects have been positive for the Irish economy, but some future measures may be less palatable.