high - income countries or to the euro area for some time. on the other hand, it also means that other macroeconomic and microeconomic factors ( including a relatively loose policy - mix, wage inertia, stubborn inflation expectations ) as well as transition - related factors ( price liberalisation, privatisation ) continue to play a key role in explaining inflation outcomes in many accession countries and that, therefore, the persistence of inflation differentials with the euro area cannot be attributed to the balassa - samuelson effect alone. also with regard to real convergence, the challenges are significant. income levels in accession countries are far below the levels of the euro area, and discrepancies of this magnitude have never been observed in previous eu enlargements. moreover, the process of catching - up in terms of real incomes will be very slow, likely to take many years, if not decades. hence, even if different income levels are compatible with economic and monetary union ( emu ), it is desirable that the real convergence of accession countries towards the euro area increases further, particularly as real convergence will foster economic integration with the euro area and minimise the risks and effects of asymmetric shocks in an enlarged euro area. against this background, the central banks of accession countries should simultaneously be concerned about the need to further advance disinflation and to catch - up with real income and price levels in the euro area. the strict respect of the maastricht inflation criterion should be seen as a medium - term objective and not as an immediate goal, if progress towards the achievement of this criterion would jeopardise the catching - up process. nevertheless, the ultimate fulfilment of the maastricht criteria over the medium term should provide monetary policy with the appropriate framework for gradually lowering inflation rates, thereby contributing to macroeconomic stability and sustainable growth. together with the maintenance of inflation differentials with the euro area, catching - up in terms of real per capita income and price levels may also imply an appreciation of the real exchange rate. in this fashion, exchange rate policy should support the convergence process without any constraint to real sustainable growth. again, neither the eurosystem nor the ecofin council can recommend a single exchange rate policy as the appropriate one to be pursued along the road towards the adoption of the euro. it is clear, however, that some accession countries will have to modify their exchange rate strategies to make them compatible with erm ii requirements. this applies mainly to

the existing free floats ( e. g. poland ) and pegs against anchors other than the euro ( e. g. latvia and lithuania ) ; in these cases, it will be crucial to identify the optimal timing of the revision of the different regimes. in this context, i should also highlight that erm ii membership should not be seen as a mere " waiting room " prior to the adoption of the euro, but rather as a meaningful and flexible framework for the achievement of further real and nominal convergence with the euro area. compliance with the treaty in the field of central bank independence and other legislation of concern to the ecb the ecb is not formally associated with the negotiations on accession, and we have no intention to compete with the european commission and the other entities involved in this process. on the other hand, the timely implementation of the acquis communautaire within the ecb's field of competence is of crucial interest to the ecb for a number of reasons. one reason relates to the new status of the central banks of accession countries from the date of eu accession. at that point in time, these central banks will become members of the european system of central banks ( escb ). moreover, commercial banks of accession countries will also be affected by accession, and we need to know that they operate in a sound and stable legal environment. for instance, the rules of the internal market and the " single financial passport " will allow credit institutions established in an accession country to obtain indirect access to eurosystem facilities – such as monetary policy operations and payment systems – through branches located in the euro area. the interest of the ecb in this process therefore relates especially to the independent status of central banks of the accession countries and to the implementation of sound legal regimes in the area of financial law. at a later point in time before an accession country adopts the euro, further legislative amendments will be required in order to integrate the central bank into the eurosystem and to enable it to fulfil its part in our monetary policy and other operations. so, what has been achieved in terms of legislative amendments in accession countries and what remains to be done before accession? the ecb co - operates with the legal experts of the national central banks of the accession countries in order to follow the legislative developments, and i can therefore give some indications of the degree of progress. turning first to the requirement of central bank independence, several accession countries have amended their central bank legislation, although further