##term macroeconomic conditions, but also to corollary risks with long - term effects. should these risks threaten to materialize, however one gauges the probabilities, i am confident that members of the fomc will have the tools and convictions to adjust policies appropriately. conclusion monetary policy has done much to ease credit conditions and improve financial market functioning. and it is playing an important role in setting the conditions for the real economy to prosper. but, the federal reserve cannot and should not do it alone. other policymakers must bear their burden and do their part to encourage more - robust economic growth and establish the conditions for stronger employment.

, inflation rates are expected to remain in line with the eurosystem ’ s definition of price stability of below [, but close to ] 2 % over the medium term. neither wage developments nor inflation expectations are to date considered a major risk to this assessment. economic and trade integration in europe has proven a fruitful co - operation for all involved parties. the current eu member states experienced deepened trade integration, a speeding up of the convergence process of income levels, and better access to a broader knowledge pool. intensified peer pressure increased incentives to stick to sound macroeconomic policies and to implement overdue structural reforms. all these factors contributed to a stable and favourable economic environment, even though many challenges still remain to be tackled. now, on the eve of eu enlargement, it is time to look ahead. i am convinced that all involved parties are going to benefit from this further integration in europe. the new member states will certainly gain most from their new status, but also the current eu member states, especially those with strong trade links towards the enlargement area as for example austria, will also experience positive effects. while there may be initial adjustment costs in some sensitive areas these costs should be of a temporary nature and will be outweighed by far by the positive long - term effects, related to trade creation, increased competition and intensified foreign direct investment flows. actually, in this respect one does not even have to look to the future ; a considerable part of the expected benefits has become reality even today. the european agreements eliminated trade barriers already in the second half of the 1990s, causing imports from central and eastern european countries to the eu to double in the first five years. supported by intensified trade, the stabilization of expectations and the decrease in interest rates, the acceding countries experienced a gdp growth rate of 3. 6 % in 2003, well above the euro area average. since january 1, 1999, when eleven eu member states entered the third stage of economic and monetary union ( emu ) by adopting the common currency, the euro has gained international importance. further to its role in trade and financial markets, where it has been well received, the euro has asserted itself as an important official reserve currency and as an anchor in exchange rate regimes in many non - euro area countries. increased price transparency, lower interest rates and transaction costs, and the import of stability and credibility are only some of the manifold benefits of the euro. i would, however, like to stress one specific aspect of monetary integration that