stability in the euro area will be promoted by the common currency. many changes in the political and structural conditions in europe are yet to come. europe is a region departing for more integration and a brighter future. this makes it particular attractive for potential partners. iii the long history of fruitful european - arab partnership leaves us with a unique legacy and forms a basis for us today to revive our commercial, cultural and political links. especially the traditionally good german – arab relations of the past are a call to improve the current cooperation between these two regions. 300 million europeans and about 350 million arabs, including all people in the middle east, need to cooperate closely. a united europe may include east and south - east european states within the foreseeable future. by then, the middle east would be a direct neighbour of the euro area. clearly, good neighbourly relations – marked by peace, fairness and much closer economic interrelationships than today – should be in the interests of both regions. both regions have a lot to offer. the arab region is still gaining in importance for international stability and energy supply. its large role in international finance, not only by the recycling of petrodollars, is being acknowledged. within a couple of years the arab countries will probably also be better represented in international organisations and better integrated in world politics and the global economy. i do know that the european union is seen as a highly instrumental – or even natural – partner in the process of modernisation which arab countries are undergoing at present. therefore, the process of cultural and economic convergence between these two regions should be accelerated. economic and technological integration, cultural respect and political necessity have been identified as its characteristics. conferences like this offer a great opportunity to enhance mutual understanding. may this conference also pave the way for mutual beneficial cooperation.

this much more than those in western germany. the considerable boost to income in the first few years after german unification – a good part of which was financed by western transfer payments – led to east german savings ratios initially rapidly approaching a level comparable to that in western germany. the fact that the catching - up process subsequently faltered had a significant adverse impact on the savings activities of the population in eastern germany. the deterioration of the income situation was further aggravated by the increasing burden of taxes and social security contributions. in 1998, the wage tax and social security contributions alone, accounted for around 22 % of private gross income, that means 1½ percentage points above its 1991 level. higher indirect taxes were an additional factor. besides the sluggish development of the economy as a whole, the declining power of self - alimentation and the upward movement of the fiscal burden, the increasing share of households with a low savings ratio also had a contractionary impact on savings in the longer term. those households include, for example, single - person households, whose number has risen more than twice as fast as that of all households in the old lander in the past 20 years. firstly, this reflects the ageing of society. 10 secondly, changes in the spending behaviour of people growing up can also be observed. evidently, present consumption has gained ground at the expense of future consumption. the younger generation ’ s higher propensity to consume has probably been boosted as well by expectations of future inheritances and gifts which are regarded as a substitute for own provisions for the future. the inheritance volume alone probably amounts at present to between dm200 billion and dm250 billion annually. the importance of financial asset transfers between the generations is likely to increase further. it remains to be seen whether this will have a dampening effect on private savings and the domestic supply of capital in the future. 11 with a view to the anglo - saxon countries it is justified to ask whether wealth effects might not also have played a role in the decline in savings in germany in the 1990s. in my opinion, such influences can be more or less neglected in germany so far. for example, four - fifths of the increase in private financial assets from 1990 – 1998 was due to the accumulation of current savings and only one - fifth – on account of the limited holding of shares – was attributable to capital gains. 12 in the united states and the united kingdom the corresponding ratio was around two - thirds. though i am sometimes told by