from 4. 75 p. c., a level lower than in north america ). these moves had moreover become desirable given the weakening economic activity in the euro area. * * * the economy of the euro area has been affected, more than originally thought, by the slowdown in the united states, ( which itself has been more important and long lasting than initially foreseen ). admittedly, since trade between european countries has become internal trade, from a monetary point of view, paid for in euro, our countries have become less dependent of their foreign trade as such. but other transmission channels have developed : european financial markets have grown, but wall street still sets the tone ; as european companies have invested on a large scale in the united states during the last years, the height of their profits and investments is more influenced by their results on the other side of the atlantic than was previously the case. finally, different shocks, such as the increase in oil prices or the crisis of the new technologies have hit all industrialised countries and more recently the tragic events of september 11th have significantly increased uncertainty all over the world. it is true that the economy of the euro area is running for the moment at a very slow pace. however economic activity should return to a much more satisfactory path in the course of next year. normally the high level of uncertainty currently affecting the world economy should diminish. and, with the exception of the confidence of consumers and entrepreneurs, the conditions for a recovery are already present in europe. i think of the gradual effects of the measures favourable to growth that have already been taken ( interest rate cuts and in many countries also tax cuts ) ; of the fact that inflation is low and is still declining and that financing conditions ( both short term and long term interest rates ) have become very favourable. moreover consumers in the euro area are hardly indebted and there has been less excess in investments, which should make it easier for consumption and investment to take off again if non - economic uncertainty progressively recedes. * * * europe is not an island as we have seen in 2001. however, the full introduction of the euro should, without immunising us against external influences, allow the euro area in the coming years to register supplementary growth owing to supplementary stability, efficiency and visibility. more stability : since the birth of the euro in 1999, much has already been achieved in this field. within the euro area exchange rate fluctuations have disappeared. a framework has been set up for a macro

cases. moreover, the pact has also established a framework to encourage people reaching the end of their career to keep their job or return to work. financial incentives have therefore been introduced, including a new bonus system granting a pension supplement for people continuing to work after the age of 62. this should push up the actual retirement age itself. the pact bears witness to an awareness and brings in an indispensable change of trend. according to the work done by the study group on ageing set up within the high council of finance, it is a significant stage in the process, but still not enough in itself to bring the employment rate in belgium up to a satisfactory level. * * * before summing up, i just have to say a few words about the question posed by the organisers of this debate to each of the contributors, namely, which is the best method : harmonisation or decentralisation? do these few selected examples of measures taken in belgium enable us to draw some lessons about the best strategy for continuing and speeding up implementation of the structural reform so badly needed by european economies? first of all, i would point out that this reform applies to existing situations which differ radically from one country to another, even from one region to another. these specific characteristics, which can range from the institutional set - up to the labour relations and social security system, the structure of the economy or even the preferences of the various parties involved, must be taken into account when drawing up appropriate measures, likely to get sufficient backing from society at large. faced with these arguments in favour of decentralisation, we should not overlook the importance of the common approach developed at european level, in the context of the lisbon strategy. its contribution has been primordial in making structural reform a subject of national debate. the use of benchmarking and promoting " best practice " also come into this awareness - raising effort at national level. furthermore, the european dimension helps reap the benefits of positive externalites factors stemming from close coordination of reform measures between countries, and helps keep the risk of possible " beggar - my - neighbour ” policies to a minimum. in the updated lisbon strategy that they endorsed in 2005, the member states and the eu authorities have put together a useful combination of a common and decentralised approach. the broad lines are drawn up at european level while the member states are now given more responsibility in implementing reform measures. individual member states mainly have their say by adopting national reform programmes, setting out government