lower and with ageing populations, significant emigration and decreasing investment rates, focus has turned to structural reforms and institutional quality. labour and product market liberalisation, or business friendly environments almost became mantras of central bankers in their communication with governments and the broader public. european institutions have started to stress the importance of the quality of the institutions. and not only their quality, of course. yesterday morning i spoke in croatia about the need to improve the efficiency of the judicial system. it is fair to say that many reforms have already been undertaken across europe and that many countries are now seeing the benefits of such policies. for the last couple of quarters, every new gdp data release by eurostat has been a positive surprise, while forecasters have been raising their gdp forecast for the ea and the eu. however, while growth has resumed in all countries, medium - term growth potential in the region is insufficient to ensure pre - crisis pace of real convergence. namely, for convergence to be sustainable, long - term potential per capita growth must be consistent with an expansion of demand. in other words, gdp growth that results from strong capital inflow, foreign demand shock, or fall in interest rates due to perhaps euro area enlargement process, could prove to be unsustainable. so, the question is, did we take convergence for granted? was one of the great features of the european integration process only a temporary and unsustainable phenomenon related to the initial'low - hanging fruit'reforms that corrected vast resource misallocation problems, followed by a huge inflow of foreign capital before the crisis? will convergence return back to a faster speed, will it continue at a slower speed, or maybe even stop or reverse? is convergence still here and, even more importantly, is it here to stay? well, as it has been shown already at this conference, convergence is still present but it has slowed down compared to the pre - crisis period. of course, having said that, we have to keep in mind that cee has come a long way since the beginning of the transition. our progress has been tremendous. if we go back to 1995, the average level of income per capita in cesee countries was below 40 % of the old europe ’ s income ( in pps terms ). by 2008 it increased by a half and reached 60 % of the eu15 level of income. and in some regions, like the baltics, developments were even more spectacular with relative income per capita doubling in

marko skreb : the transition process - it ’ s all about people, isn ’ t it? text of the jacques de larosiere lecture given by mr marko skreb, governor of the croatian national bank, at the ebrd ninth annual meeting, held in riga, latvia, on 21 may 2000. * * * mr president, ladies and gentlemen, let me first of all say how deeply honored and humbled i am to be chosen to deliver this year ’ s jacques de larosiere lecture1 on the occasion of the ninth annual meeting of the ebrd. it is a special honor not only for me, but for my country, croatia, as well. let me thank you all for this. it is a privilege to deliver this lecture after only two distinguished central bank governors : hanna gronkiewicz - waltz two years ago and jacob a frenkel last year. which reminds me that right now i am breaking one of the main bis rules : “ never speak after jacob frenkel ”. my only hope is that the time lag of one year is long enough for your memories to fade. making a speech to honor mr de larosiere is an enormous challenge. i have always been very impressed by his work and his distinguished domestic and especially international career. i met mr de larosiere for the first time in 1996 ( after i became the governor of the central bank ) and have managed to stay in touch regularly since then. even in the very difficult moments in croatia ’ s history during periods of international political isolation, we managed to have a very honest and professional relationship, which today i respect even more than i did then. for me the highlight in our relationship happened last year when mr de larosiere accepted the invitation to give the keynote speech at the traditional vth dubrovnik conference on transition economies organised by the croatian national bank. definitely, his knowledge, experience and insight into the transition process were invaluable to the conference. the title of his lecture was non - pretentious ( like the man himself ) : “ transition economies ”, but his messages were very strong and deep ( again, like mr de larosiere himself ). in his concluding remarks mr de larosiere, among other things, had the courage to point out some of the negative human facets of transition, for example : “ … in some countries the human costs of transition have been high, for instance in terms of male life expectancy.