still sounded like an overly visionary project. with the most important wave of enlargement about to become reality, i believe that this is the opportune time to revisit. consequently, the topic of this year ’ s conference “ the economic potential of a larger europe - keys to success ” is meant to cover the most important topics of previous east - west conferences. today and tomorrow we will be discussing issues, such as human capital formation, financial stability, the specification of a suitable policy mix or structural reforms - topics that are key to a successful transition process and therefore also to the provision of a prosperous growth environment within a larger europe. on the eve of the upcoming eu enlargement, we will take a look at these increasingly relevant topics from two perspectives. on the one hand, we will investigate the importance of the above - mentioned factors for the success of the past integration process within the european union as well as for the ongoing transition process in the current group of acceding countries. on the other hand, we will also take a forward - oriented approach and address the challenges ahead. here, we will, however, not only focus on the south - eastern european countries that are already on the accession track, but also debate the role the european union and the eurosystem can play in fostering the cooperation with and in promoting reforms in the countries as summarized under the “ wider europe ” strategy of the european commission - russia, the ukraine, moldavia, belarus and the southern mediterranean region. today ’ s morning is dedicated completely to celebrating the opening of the new joint vienna institute and will revolve around the people and institutions that have played a major role in the success story of the jvi. you will be hearing about the importance of capacity building, human capital formation and central bank cooperation for the effectiveness of development programs as initiated by international institutions. even though all of these programs each have a special focus, they share the common characteristic that they can only be successful if training courses like the ones offered by the jvi provide the essential sound human capital base. deputy minister pyatnytskiy from the ukraine, a prominent graduate of a jvi training course will open the following panel discussion with an introductory statement, giving us a first - hand account of his jvi experience. during the panel discussion distinguished representatives of international training institutes will get the floor to relate their experience with technical cooperation programs : the bis financial stability institute, the world bank institute, the imf institute and the o

. the euro area economy is held back not only by current geopolitical tensions, but also by frictions in labor and product markets. structural reforms in these areas are of utmost importance to increase the flexibility of the economy, thereby improving its resilience against detrimental shocks and raising the euro area ’ s noninflationary growth potential. policymakers are well aware of this assessment. however, the lack of clear and decisive progress in implementing structural reforms weighs on confidence. it is high time to reassure business, investors and consumers by delivering overdue structural reforms. such measures must be geared towards more flexible labor markets and higher labor participation rates, the full implementation of the eu single market, free and sound competition along with further cutbacks in state aid, and consumer - friendly retail market regulations. this would enhance productivity, thereby making the euro area more attractive for domestic and international investment, it would promote economic activity and raise the noninflationary growth potential of the euro area, and it would enhance employment, thus boosting consumer confidence and private consumption. indeed, it is up to us to set in motion such a virtuous circle! the policy program of the newly elected austrian government includes several important measures to foster austria´s attractiveness for business and investors. starting out from a small budget deficit of 0. 6 % in 2002, the government´s fiscal policy stance foresees some cyclically motivated widening of the deficit to 1. 3 % this year. looking ahead, the government intends to make significant tax cuts. the cutback of the share of government in the austrian economy is appropriate and in line with international endeavors to improve the quality of public finances. the tax cuts should be accompanied one for one by expenditure cuts so as to ensure that a balanced budget is achieved over the cycle. where do central and eastern european countries enter this picture? it is my conviction that this historic reunification of europe will mutually strengthen today ’ s accession countries and the eu. having said this, challenging tasks lie ahead. first and foremost, we will have to provide stability in a broad sense : political stability, macroeconomic stability, financial market stability and price stability. the framework which is in place provides for such broadly based stability. thus, enlargement will encourage growth and employment in a wider europe. economic and monetary integration of the accession countries will proceed in three stages : first, the acceding countries will join the eu in may 2004, second, the new member states will participate in erm ii,