else it holds that the data say nothing and 2 / 4 bis central bankers'speeches interpretation holds sway. so how about this? for years before and after introducing the euro, the slovak economy has constantly been catching up with the wealthier countries, including us. we, meanwhile, are constantly catching up with the countries to our west. economics rather relies on the poorer catching up with the wealthier. and the richer a country is, the harder it is to catch up. looking at the numbers, slovakia is still 10 % behind the czech republic in terms of economic output and above it in terms of the price level. it ’ s a poorer and more expensive country. yet tens of thousands of slovaks still travel from this euro paradise to the czech republic to work and study. an equal but opposite flow is nowhere to be seen. 7. the prague - copenhagen connection : i have to add with some bitterness that many in the czech republic like having their own currency but not necessarily their own monetary policy. this magical contradiction can be seen in the pleiad of ostensibly conservative political opponents of the euro in the revitalised euro debate. in one breath they say that we should not adopt the euro – so that we can keep our own currency and hence retain the ability “ to weaken the koruna in bad times ” – and then criticise the czech national bank for doing exactly that in the bad times of 2013. they then happily add that greece would have benefited from having its own currency and that germany is profiting from the euro being weaker than the deutschmark would have been. the same, however, doesn ’ t go for the czech republic after 2013. these endearing inconsistencies are present throughout the population. here again, however, the eurozone and its satellites offer parallels. the danes have a fixed exchange rate against the euro ( and previously had a fixed rate against the mark ) and thus in effect “ buy in ” monetary policy from frankfurt. they have their own notes and coins but not their own monetary policy. note this fine “ scandinavian paradox ” : the danes have an opt - out from the euro following their 2000 referendum, yet they do not make their own monetary policy, nor did they before the euro was created, whereas the swedes do not have an opt - out ( although they have been trying not to fulfil the criteria and not to join ever since rejecting the euro in their 2003 referendum ), yet they pursue autonomous monetary policy. i sometimes

doubt a valid point in all these arguments, some of the accession countries ’ central banks have expressed much less enthusiasm about the erm2. i wonder whether we are able to reach a consensus on this subject today. on the practical level, we all have to define our policy positions as regards the appropriate timing of erm2 membership, choice of central parity, supportive policy mix and so on. our debate should pay attention to the differences among the individual accession countries in addressing these policy issues. so far, i have focused on the monetary aspect of emu entry only. in many cases, though, monetary policy is unlikely to be the major bottleneck in the accession process. for many countries, the key practical constraint seems to be their public budgets. notable exceptions are the baltic states and a few other candidate countries, for which there seem to be few obstacles to early eurozone entry in this respect. but many other countries run large public deficits, even after subtracting one - off transition costs. the necessary reforms would have to include changing the public finance structure to address the ageing problem, overly generous social security systems, etc. these are problems shared by all european countries, and are politically quite hard to resolve. the consolidation of public budgets to a sustainable position is thus one of the key challenges for some accession countries ( as well as for the present eu members ). this is all the more true because upon eu accession the stability and growth pact will also become relevant to the new member states. this is something that has not been fully realised and appreciated yet, at least in the czech republic. it will be very interesting to hear the experience of the other accession countries. there are many more aspects to the accession debate. these include balance - of - payments developments and exchange rate issues ; the role of structural policies in achieving the optimumcurrency - area criteria ; the role of fiscal and income policies in fulfilling the maastricht criteria both on inflation and on exchange rate stability ; financial sector reforms and developments, including their implications for monetary transmission ; and so on. i could spend much longer discussing these matters, as well as focusing more deeply on the issues that i have already mentioned. nonetheless, i do not want to prejudice our debate by volunteering my own opinions at the very beginning of this conference. therefore, let me stop at this point and pass the floor to the chairman of our first panel debate, mr jakob a. frenkel ( from merrill lynch international )