various institutions and fora have produced a remarkable convergence of ideas concerning domestic economic management. the general approach to economic management within developing, emerging, and transition economies as well as within the industrial world can perhaps be summed up as “ macro - economic stability and supply - side flexibility ”. these objectives pertaining to both monetary and fiscal policy were agreed to at the 1994 annual meeting of the imf in madrid. the emphasis since then is on price stability as the immediate goal of macro - economic policy. this is not simply an end in itself but measures the balance between aggregate demand and underlying supply in the economy as a whole. in effect the aim of monetary policy in particular is to moderate, rather than aggravate, the economic cycle, and so to provide the basis for sustainable growth at around the underlying rate of potential growth. in relation to fiscal policy, the emphasis is to limit public sector borrowing, and the outstanding level of public sector debt, to levels that can be sustained into the medium and longer term without the need for increasing taxes or the imposition of rising real interest rates. you will have noticed that these principles, already formalized before the madrid declaration, are also the ones underlying european monetary union. this aim of macro - economic stability brings into sharper focus the structural, supply side, of the economy. here, too, there has been a strengthening international presumption in favor of open markets and free competition - both domestically and internationally - with a continuing strong presumption against predatory trade or the use of competitive devaluation. the justification is that undistorted competition contributes to potential global economic growth through increased efficiency and the more effective allocation of productive resources. faster growth in turn provides a more favorable context for addressing social concerns, including the issue of poverty. monetary union : the european dimension with the introduction of the euro, the economic weight of the single market has risen to a level matching that of the usa. and the single currency has gained an important international dimension : the euro segment of the global money market has risen to about 25 %. in the bond market, too, the euro plays a crucial role in fostering a deeper and more liquid market. the introduction of the euro paved the way for issuers to access a broader base of investors. investors too have gained access to a wider spectrum of investment opportunities. the euro ’ s share in net issuance currently amounts to 39 %. regarding its use as an official reserve currency, the euro has already attained the same weight

as its predecessors. within the euro area, monetary union has kept member countries from being exposed to harmful intraeuropean exchange rate tensions of the type that many countries used to suffer when external shocks occurred. it has become quite obvious that austria ’ s inclusion in the stability - oriented economic and monetary union has protected our country from negative shocks much more adequately than was possible under past regimes. moreover, the almost four years of emu bear impressive testimony to the fact that the stability - oriented interplay between monetary and fiscal policy provides a solid foundation which was well suited to weathering the economic policy challenges of this period. with the euro the eu successfully supplies an important international public good in the form of a stability anchor with deep and attractive financial markets. this is especially relevant with a view to enlargement of the eu. european integration will only be truly successful if it reaches out to the whole of europe. if the eu manages the enlargement process successfully, this will also be conducive to the eurosystem´s goal to guarantee stability for the whole euro area. such a mutual improvement is desirable in a very broad sense : political stability, financial market stability, macroeconomic and - in the particular interest of the eurosystem - price stability. already today, the euro is a key currency in central and eastern europe. in most of the ceecs ’ monetary policy strategies, exchange rates play a vital role and, wherever they are not a formal or informal intermediate target, they are at least a key monetary policy indicator. it is the euro upon which the ceecs ’ currencies are oriented, or to which they are formally linked. thus, emu and the euro are already an anchor for stability for ceecs. moreover, enlargement will thus extend the zone of stability in europe, strengthen europe ’ s international competitive position and will contribute substantially to prosperity, security and peace in the long term. integration of financial services markets in the eu beyond monetary union a huge amount of work has been undertaken in the eu to improve the functioning of the single market and the international financial system. by abolishing national boundaries and harmonizing different legislations, european integration has fostered the development of a single financial market in europe. but the current regulatory and supervisory framework still strongly relies on national responsibilities. the eu ’ s brouwer report found that there is a need to enhance arrangements for cross - border and cross - sectional co - operation, to improve the alignment of