by gdp per capita figures, austria now ranks third in the eu right behind luxembourg and denmark. the goods exports - to - gdp ratio in austria grew from 24 % in 1995 to 38 % in 2004 and foreign direct investments increased in recent years from 12 % to 22 % of gdp. in addition, the average ( cpi ) inflation rate fell from approximately 2. 8 % in the decade before eu membership to some 1. 7 % thereafter and at 5. 1 %, the unemployment rate is one of the lowest in the eu. just recently austria ’ s reform efforts were cited as a positive example by the imf and the oecd in the course of their annual consultations on the austrian economy. as others have already observed, the euro was a quantum leap in the direction of creating an economic area without internal frontiers. emu marked the end of a europe fragmented by monetary differences as the euro became the single currency of more than 300 million people with an economic weight roughly equal to the usa. the euro quickly turned into the second most widely used currency and is now a key currency for the monetary policies of many countries. as for its important international dimension, the stabilizing influence of the euro on the international financial system was already successfully demonstrated after the tragic events of september 11, 2001. given the size and the economic clout of the euro area it came as no surprise that emu actually generated a zone of stability that is even larger than the euro area itself. this can be seen most distinctly in those countries closest to the euro area such as the new member states of the eu and the countries currently conducting accession negotiations with the european union. the stabilizing effects of the euro, however, go beyond providing an anchor in the exchange rate regimes of the new member states. since they have to implement the convergence criteria foreseen by the treaty on the 1 / 3 european union in order to ultimately adopt the euro, this has so far led to an impressive record of macroeconomic stability as well as exchange rate stability on their way to emu. the firm commitment of the euro system – as the european central bank and the 12 national central banks from the member states of the euro area are called – to pursuing price stability as its main objective remains a key factor behind market confidence in the euro as a global and stable currency. since the euro system became responsible for monetary policy in 1999, the primary objective of maintaining price stability has been successfully pursued. inflation volatility has stabilized – the average

. apart from the necessity to successfully maintain and foster stability and growth, europemust also meet the challenge of the recent geographic expansion of ten new member states, which is of immense historical magnitude. the maastricht treaty was negotiated by 12 countries. we are now 25, and virtually already 27. hence, in europe a unique “ vertical ” economic and political transformation and a geographic “ horizontal ” expansion of an immense significance are intertwined. the need to accommodate and integrate 458 million european fellow citizens will certainly keep us on our toes. i consider it also part of the ongoing process that we will be faced with difficult moments from time to time, the european constitution being one example. in my opinion a temporary setback on the way to a more comprehensive european union will in no way stop the process. it might just sharpen our awareness for striving to strike the right balance between widening and deepening the eu, as integration is the driving force for securing peace and welfare in europe, also for the next generations. with my renewed congratulations and the best wishes for your personal future, i thank you for your attention. 3 / 3