’ s real annual gdp growth will slow to an average of 5. 5 % for the period 2010 - 30 as a result of less favourable developments in the structural factors i have just described, namely export demand, demographics and capital accumulation. according to the findings of the adb study, policy improvements in areas such as education, research and property rights could instead increase gdp growth by at least 1 percentage point over that period. chinese measures to achieve more balanced growth have also included, over the past five years, very important exchange rate reforms. both in july 2005 and in june 2010, the ecb and other euro area authorities publicly welcomed china ’ s moves towards a more flexible exchange rate regime. the potential for exchange rate adjustment implied by these decisions needs to be further exploited. given the importance of china ’ s role in the global economy, further flexibility of the renminbi would be another element conducive to more balanced growth. greater exchange rate flexibility could help in achieving the objective of improving economic efficiency and market - based resource allocation. it would allow greater control over domestic monetary policy and help to adjust the policy stance in line with gdp growth in a timely manner in order to prevent the emergence of inflationary and asset price pressures. * * * * * in conclusion, i would like to emphasise once again that, given the global nature of the challenges at stake, all major economies should do their part by striving to implement the policy measures collectively agreed in order to rebalance global growth patterns. multilateral cooperation is not the easiest way forward. however, in the absence of cooperative policy action, the pain that purely market - driven adjustment would bring about in the transition phase could prove too severe for us to simply dismiss this course of action today. given their size and importance, europe and china both have a key role to play in the global resolution of the crisis. it is important to understand that a stronger, more sustainable and balanced global economy – which is in all our interests – can only be achieved if policy makers from all countries work together. we still cannot be sure that the g20 framework will be implemented effectively. it is therefore paramount that the systemically most relevant countries fully live up to the commitments made in pittsburgh, toronto and seoul. lee, j. w. and hong, k., “ economic growth in asia : determinants and prospects ”, adb economics working paper series, no 220, economics and research department, asian development bank, manila, 2010 (

requirement for a successful monetary integration process. inflation rates in many new member states have picked up recently to an average of almost 5 %, following increases in food and energy prices and indirect tax changes. the challenge for the new member states is to contain inflation and inflation expectations in an environment of rapid catching - up. besides solid macroeconomic policy frameworks and prudent wage policies, progress in structural reforms is conducive to price stability by improving the supply side of the economy and enhancing the growth potential. this brings me to the second challenge that i want to mention : the need to achieve sound fiscal positions. fiscal deficits are on average high or even very high in a number of new member states and mostly despite very high economic growth. their governments are confronted with competing expenditure demands, including public investment in infrastructure and the need to strengthen the effectiveness of public administration and the judicial systems. this, however, should not be seen as an excuse to delay fiscal consolidation, but as an additional reason to design and implement a credible consolidation path based on durable and growth - enhancing structural reforms. it is important to bear in mind that fiscal consolidation in the new member states becomes increasingly important in the course of the monetary integration process and it is essential for a smooth participation in erm ii and the eventual adoption of the euro. conclusion let me conclude. the historic enlargement of the eu is now six months ago and i think we can say that is has been a genuine success. following a remarkable transformation in the past 15 years, the further integration of the new member states into the european family has progressed smoothly and without any disruptions. the new member states have shown an impressive economic performance, though various important challenges still remain to be fully tackled, including those relating to the recent pick - up in inflation and to fiscal imbalances.