maintaining the current monetary policy stance, with an ecb interest rate of 3 % for the main refinancing facility. as we indicated in the ecb press release of 3 december 1998, the intention was also to maintain this rate “ for the foreseeable future ”. indeed, monetary policy in stage three starts with interest rates which are very low by historical standards. let me now give the floor to the vicepresident to report on various aspects of the final preparatory work for stage three of economic and monetary union. preparations for the changeover to the single currency on 11 december 1998 the ecb issued a press release on the practical issues relating to the forthcoming changeover weekend as a follow - up to the information provided in the press release issued on 3 november 1998. at its meeting today, the governing council took stock of the state of the preparations of the ecb and of the national central banks and took note of the very detailed planning which has been coordinated by the special changeover weekend committee which the governing council set up in november. the governing council also took note of the outcome of the recent “ dress rehearsal ”, which had simulated the full operational activity of the escb using normal systems and procedures and, if they were to fail, contingency procedures. in line with the announcement made in the joint communique issued on 2 may 1998 – by the ministers of the member states adopting the euro as their single currency, the governors of the central banks of those member states, the european commission and the european monetary institute – the governing council reconfirmed today that appropriate market techniques would be used to ensure that on 31 december 1998 the market exchange rates, recorded during the teleconference held between 11am and 11. 30am cet and used for calculating the daily exchange rates of the official ecu will be equal to the erm bilateral central rates. these bilateral central rates were published in the joint communique in the form of a parity grid. – 4 – the ecb has also been involved in the testing of the procedures to be applied to the fixing of the irrevocable euro conversion rates so as to minimise the likelihood that technical problems might arise on 31 december 1998. as part of the process of fixing these rates, the governing council – in consultation with the general council of the ecb – will adopt by special teleconference its formal opinion on a proposal from the european commission, which the ecb president will deliver personally to the

current account deficit in the months to come. another noteworthy development are rising oil prices from some 10 us - dollar per barrel in the late 90ies, to some 80 us - dollar today. at first, rising oil prices led to a significant worsening of trade balances for energy importers, and to considerable trade balance improvements for oil exporters, which were perceived as a mainly cyclical development. in the meantime, high oil prices are perceived as a rather structural and probably lasting event, which is going to allow oil exporters to spend more of their energy - related income on imports, thereby ameliorating global imbalances. finally, let me also touch upon the euro area. for several years the euro area ’ s balance of payments has been broadly balanced. nevertheless, the euro area has to contribute to and prepare for the orderly resolution of the global imbalances. why? because ultimately, the – at least in the longer term – necessary rebalancing of the imbalances will be accompanied by significant shifts of productive factors from and to tradedand non - traded sectors, respectively shifting resources between export orientated - and domestic demand orientated sectors. in particular, this will hold true for countries with large current account imbalances, but also for the euro area, as there are significant current account imbalances within our region. as you would expect, flexible and productive economies with sound and well structured public finances certainly will cope better with these challenges. albeit important structural reforms in europe have been implemented already, much remains to be done in order to improve potential growth, thereby reducing growth differentials lastingly. we have to respond with policies designed to use opportunities of globalization, particularly to increase productivity and competitiveness, while minimizing unavoidable adjustment costs. the right answer to globalization and international competition is therefore to continue and intensify the lisbon process already mentioned. there is no doubt that globalization has worked well for the people of europe. after nearly nine years of experience, economic and monetary union has proven to be europe ’ s most forceful strategic response to global economic change. however, we have to concede that big changes rarely only create winners. in many eu countries, regrettably, people are critical and see little benefit from globalization. there has been an undue proliferation of fears that increased import competition from low - wage countries would put too much pressure on domestic producers and workers and that economic activity would allegedly be relocated abroad. sometimes, these concerns have