the country - specific context and institutional features. in india, we have been adhering to a cautious and sure - footed approach in our reforms so far and there is merit in doing so since it enables us to avoid policy reversals on the one hand and build on the past strengths on the other. the experience of the 1990s has shown that our approach to financial integration has stood the test of time. even as we have embarked on a measured pace of financial liberalisation, we have ensured that we have a well - capitalised financial system by international standards, with low levels of loan delinquency. our financial markets are orderly and smoothly functioning and the ability of our financial intermediaries to deal in various segments of the financial market spectrum is improving almost continuously. the optimism generated by the recent gains in macroeconomic performance warrants a balanced consideration of further financial liberalisation. undoubtedly, it contributes to growth through enhancement of allocative efficiency in the use of resources, by promoting financial deepening and by expanding the volume of resource flow to the economy. at the same time it is important to recognise the risks to the financial system emanating from stressed macroeconomic fundamentals such as those associated with fiscal deficit, inflation and uncertainties in international financial markets. turbulence in the domestic financial systems tends to amplify related distortions and generates undesirable fluctuations in economic activities. further, it also exposes the economy to external shocks and fluctuations in international business cycles. there could, therefore, be a trade - off in the initial stages while considering financial liberalisation and in policy terms, the trade - off takes the form of a choice between measured and premature financial liberalisation as also appropriate sequencing, the choice being contextual and often judgmental. in general, the downside of a premature financial liberalisation would be in the form of financial instability and associated social costs of disruption which are significantly higher for a developing economy like india. india has made significant progress in financial liberalisation since the institution of financial sector reforms in 1992 and this has been recognised internationally. external financial liberalisation, in particular, has expanded at a fairly rapid pace. at this stage, the optimism generated by impressive macroeconomic performance accompanied with stability has given rise to pressures for significantly accelerating the pace of external financial liberalisation. it is essential to take into account the risks associated with it while resetting an accelerated pace of a gradualist approach. first, india ’ s public debt and fiscal deficit as a proportion of gdp is

mr duisenberg presents a few observations about the challenges facing the european union in the years ahead speech given by dr willem f duisenberg, president of the european central bank, at the edmond israel foundation in luxembourg on 11 november 1999. * * * dear mr israel, dear mr waigel, ladies and gentlemen, it is a great honour to be here today to receive the prestigious “ vision of europe ” award. it is with great pleasure that i accept this honour. i perceive this award as encouragement for the continued work of the european central bank ( ecb ) towards making our new common currency a success and delivering its benefits to business, consumers and to european citizens in general. as a central banker, my business is the conduct of monetary policy which is an inherently forward - looking task. given the long time - lags with which monetary policy decisions impact on price levels, the very essence of our work is to estimate today what risks there will be to price stability tomorrow - and to act accordingly. while it appears that the governing council of the ecb has so far shown sound judgement and a steady hand in the conduct of its forward - looking policy, as central bankers we do not pretend to be able to see into the future. what we can do is to assess future trends and their potential impact on price stability on the basis of a thorough examination of past and current developments, using a comprehensive range of analytical and empirical tools. it is with this acute awareness of the limitations of our ability to discern future developments, not only in the monetary and economic spheres, but also in the political realm, that i shall present to you some observations about the challenges facing the european union in the years ahead. using the “ central banker ’ s toolkit ”, i shall attempt to make a modest contribution to the endeavour which gave its name to this award - to shape a “ vision of europe ”. the european union today - integration in “ small steps ” and “ great leaps ” the european union at the end of this century represents an unprecedented, imaginative and successful model for the management of international relations. not only have the original objectives of european integration so far been achieved, namely to ensure peace and prosperity in what has historically been a conflict - ridden part of the world, but also the european community - and later the european union - has managed to adjust to the manifold challenges of its more than 40 - year history. such is its attractiveness that there are now many non - member countries keen to join