reichlin, “ trends and cycles in the euro area : how much heterogeneity and should we worry about it? ”, ecb working paper no 595, 2006. heinz, f. f., and m. ward - warmedinger, “ cross - border labour mobility within an enlarged eu ”, ecb occasional paper no 52, october 2006. kalemli - ozcan, s., b. sorensen and o. yosha, “ asymmetric shocks and risk sharing in a monetary union : updated evidence and policy implications for europe ”, hary huizinga and lars yonung ( eds. ), who will own europe? the internationalization of asset ownership in the eu today and in the future, cambridge university press, 2005. mckinnon, r., “ optimum currency areas revisited ”, stanford university, mimeo, 2001. mongelli, f. p., “ european economic and monetary integration and the optimum currency area theory ”, european economy, economic papers no 302, february 2008. mundell, r., “ uncommon arguments for common currencies ”, h. g. johnson and a. k. swoboda ( eds. ), the economics of common currencies, allen and unwin, 1973, pp. 114132. obstfeld, m., and g. peri, “ regional non - adjustment and fiscal policy ”, economic policy, vol. 26, 1998 pp. 205 - 260. rose, a., “ currency unions and trade : the effect is large ”, economic policy, vol. 33, 2001, pp. 449 - 461. trichet, j. - c., “ further integrating euro area economies : some reflections ”, speech at the “ 57. jahresversammlung des ifo instituts fur wirtschaftsforschung an der universitat munchen ”, munich, 29 june 2006. http : / / www. ecb. europa. eu / press / key / date / 2006 / html / sp060629. en. html. trichet, j. - c., “ how to elevate the potential growth rate of europe ”, ludwig erhard lecture, berlin, 16 october 2006. http : / / www. ecb. europa. eu / press / key / date / 2006 / html / sp061016.

gdp per capita and price levels are always likely to have stronger output growth and higher inflation. diversity may also extend to correcting past excesses in terms of overall cost and price competitiveness, particularly in the markets for tradable goods and services. in such situations, national governments and social partners need to take action to address excessive wage developments and to strengthen productivity growth, so that unit labour costs in those economies increase less rapidly than the euro area average. to sum up, this sound economic management can foster economic stability and growth, as well as reduce the impact of adverse shocks, or facilitate the adjustment thereafter. the attentive monitoring of economic and financial developments, and of changes in competitiveness in particular, understandably, for the ecb, further european financial integration is essential given its relevance to the conduct of the single monetary policy. considerable progress has already been made across various market segments. financial integration is generally more advanced in those market segments that are closer to the single monetary policy. while the euro area banking markets for wholesale and capital market - related activities have shown clear signs of increasing integration since the introduction of the euro, the retail banking segment has remained more fragmented, leaving european firms and consumers unable to take full advantage of emu and the single market. while many member states expect to increase their spending in this area, the eu will fall short of its overall target of 3 % of gdp by 2010. increasing investment in research and development is not, of course, an objective in itself. if we want to see an impact on growth, it is also the return on that r & d that matters. must be an integral part of this economic management. the public ’ s understanding and acceptance of these elements is also crucial. that is why we always strive to explain what actions we are undertaking, and why. * * * ladies and gentlemen, let me now conclude. the past ten momentous years have been rich in achievements. the introduction of the euro has been recognised as a remarkable success. since 1999, the single currency has fully inherited the degree of credibility and confidence that was the privilege of the most credible national currencies prior to the euro. inflation expectations are well anchored, and medium and long - term interest rates in the euro area are at the same low level as the levels observed for the most credible of these former national currencies. we also see a remarkable degree of resilience in a complex international environment. these achievements are a solid foundation for our future. but