the institutional reform work within the european union is approaching a stage which makes the union ready for enlargement. i am pleased to hear that denmark, now holding the eu presidency, has the firm intention to continue this process and to tackle some of the core issues during the second half of 2002. my own institution, the osterreichische nationalbank has been an active partner for central banks in transition countries since the very start of transition. initially, our contribution to institutional development consisted in technical assistance. gradually, this has evolved into technical cooperation and finally into working relationships. by now, these relationships have become integrated in joint efforts of the whole european system of central banks. being a member of this system, my bank has complemented its bilateral relations by actively promoting a dialogue between the eurosystem and the central banks of the accession countries. in addition, i would like to point out that those of you who are interested in getting more information about all these issues may consult the most recent editions of the " focus on austria " as well as the " focus on transition " of the oesterreichische nationalbank, whose general theme ties in with the topic of this year's vienna international summer university. both publications provide a number of interesting and high - quality papers related different aspects of eu enlargement. conclusion in concluding, i would like to reiterate that emu and the euro are in many respects europe's strategic response to global competition and the associated challenges it poses. emu underpins europe's role in the world and strengthens the position of our economy in the face of growing international competition. emu triggered not only monetary convergence, but also the real convergence of our economies. structural reforms geared toward efficient and flexible product, capital and labor markets, as well as sounder fiscal policies have made our economies more shock - resilient and will ultimately increase our non - inflationary growth potential. this positive and stabilizing influence is not only felt within the euro area, but also in the countries that have close ties to the euro area, such as the countries currently conducting accession negotiations with the eu. thus, with the euro as a stable anchor, emu creates a zone of stability that is even larger than the euro area itself. in this way, the euro is a catalyst for the future political and economic integration of europe. thank you for your attention!

a “ double heterogeneity ” as one of the main causes of our present constellation : a heterogeneity of national economic developments and a heterogeneity of supranational institutions. let me begin with the latter – the heterogeneity of institutions. on the one hand, a majority of eu countries have handed over the responsibility for monetary policy to an independent supranational institution : the european central bank. on the other hand, there is economic policy, which still is – in large part – the responsibility of the individual member states. this set - up follows from the subsidiarity principle, which aims to respect and support local policy decisions wherever they are reasonable. we have had to realize, however, that it is often not easy to specify the optimal level of policymaking. the lack of more centralized economic governance is especially noticeable when the second heterogeneity – the one between countries – becomes visible, as has been the case in the recent past. cross - country heterogeneity is, in the first place, a structural phenomenon. individual countries have reached different stages in their economic development ; they are specialized in different areas of economic production ; they are characterized by different sets of institutions and they have different preferences regarding the reach of the market and role of the welfare state. while these structural differences reflect national histories, national institutions and national preferences, they are nonetheless not a strictly national affair. they are not, because the idiosyncratic situation in one member state can easily spill over to other countries and to the eu as a whole. a fiscal crisis typically only breaks out at the end of a longer process of unhealthy and unsustainable development, although budgetary distress is sometimes – but not always – visible earlier on. cross - country differences are nowadays clearly reflected in almost any macroeconomic and financial time series, starting from interest rate spreads to economic forecasts. in fact, the signals coming from the most recent forecasts for the european union are quite positive and the first quarter of 2011 has shown improvements that were larger than expected. the outlook for the global economy has also improved, and this synchronicity might lead to further positive reinforcement effects for the european economy. one cannot exclude the possibility of a slowdown in recovery, but i think that the risks of an l - shaped or a w - shaped development have decreased. the picture is particularly encouraging for germany and for a number