as by the need to respond to external demands. the strength of the link between the european economic policy reform process and monetary policy entails the risk that not meeting publicly declared targets will damage the currency's standing. against this background, it is crucial for the future development of emu and the euro that the stability - oriented foundation of emu, e. g. the absolute priority that monetary policy accords price stability or the importance of the stability and growth pact, continues to be upheld. • a third angle for a comparison is the approach to european integration itself. after world war ii, the european " core countries " very quickly occupied themselves with the project of european unification, driven by the ambition to promote reconciliation through integration and cooperation. phases of expansion and deepening followed the foundation of the european union at various intervals. considering that european integration is quite a difficult process on the whole and that individual member states'conceptions of the future of the union diverge, the tenacious progress of this integration process is indeed extraordinary. austria entered the european integration process at a relatively late stage. while the effort to join a larger europe - first as a member of the european free trade association efta, and later as an ec member - was soon part of austria's integration program, whole - hearted participation in european integration was a while in coming. i believe that now that austria is a member of both the eu and the euro area, it has taken this decisive integration step. the enlargement of the european union – a step of great significance for europe and for austria – will place our country even more squarely at the heart of this integrated europe, geographically speaking. opportunities and challenges for austria ’ s economy from the austrian economic perspective, emu is tantamount to a 35 - fold increase in the size of the common currency area to over 300 million consumers. this opens up new perspectives and the opportunity to proactively address the challenges of globalization and heightened competition. the new framework benefits first and foremost the small and medium - sized enterprises ( smes ) in industry and trade, the pillars of growth and employment in the austrian economy. to illustrate the change, according to the most recent figures, some 60 % of austria's imports came from euro area countries in 2001, and some 56 % of its exports were delivered to the euro area. foreign trade with the euro area has, of course, been greatly facilitated by the single currency and by cost savings as a result, above

klaus liebscher : the euro and european integration – an austrian viewpoint luncheon speech by dr klaus liebscher, governor of the austrian nationalbank, at the international bankers forum, luxembourg, 9 april 2002. * * * introduction it was with great pleasure that i accepted your kind invitation to address such a distinguished audience and to speak about the austrian experience with european integration. in former times, luxembourg has had a very turbulent past - often triggered by the habsburgs - with countries taking turns in slicing pieces off the grand duchy. after world war ii, however, luxembourg together with the other founding countries of what is now the european union ( eu ) symbolizes the building of a united europe carried out in a spirit of negotiation and dialogue. for me as an austrian citizen, luxembourg also stands for all of the benefits especially smaller countries can derive from the eu. it may still be the tiniest state of the eu according to size but luxembourg is also one of its most prosperous ones. the grand duchy is one of the three institutional centers of the union and very often feeds new elements into the debate of and about the eu and as a result helps bigger countries to reach agreement. thus, luxembourg enjoys an influence in the eu beyond its small size and is an example of european co - operation at every level. successful euro changeover since march 1 of this year, all legacy currencies of the euro have been phased out and new euro banknotes and coins have become the legal tender in 12 of the 15 member states of the european union ( eu ). today, more than 300 million citizens in europe share the same currency. the process of monetary integration as laid down in the maastricht treaty has found its tangible expression and culminating point in the everyday life of the citizens of the euro area. from my point of view this historic cash changeover has been completed very successfully with the broad - and often enthusiastic - support of the european citizens. the changeover of the old national banknotes and coins of the 12 countries of the euro area has been a highly challenging project - and its success has far exceeded our expectations. this is also true for austria, where we had an exceptionally successful cash changeover. the austrian population accepted the new currency with unforeseen enthusiasm from the very beginning. before the introduction of euro banknotes and coins, the public - not only in austria - had some concern about potential inflationary effects due to the rounding up of prices, long queues in shops because of