taking into account what could be avoided. within the euro area, the monetary union has kept member countries from being exposed to harmful intra - european exchange rate tensions of the type that many countries used to suffer when external shocks occurred. it has become quite obvious that the countries constituting the euro area are protected from negative shocks much more comprehensively now than was possible under past regimes. indeed, major external developments in recent years, like the bursting of the equity bubble, the repercussions of the terrorist attack on september 11, 2001 and the more recent substantial depreciation of the us dollar that has resulted from the sizeable imbalances in the us economy, otherwise might have led to phases of instability within the european economy. instead, they could be weathered within a stable framework. during the past five years, the eurosystem successfully achieved its primary objective of maintaining price stability over the medium term. despite some years of rising world energy prices combined with a strong appreciation of the us dollar, the eurosystem managed to achieve low inflation and low interest rates, which will ultimately stimulate further investment and contribute to sustainable growth in the euro area. thereby, the euro will contribute to more balanced global growth and to more stability in the international financial system. the current state of the european economic and monetary union, its “ stability architecture ” and its developed rule - based “ stability culture ” truly represent a culminating point in the process of european integration. indeed, over the last half century, europe has followed an impressive path of voluntary integration of nations, so far unparalleled in history. economic integration, in particular, was successively deepened. moreover, in parallel to the process of deepening the integration, the european union was successively enlarged. at present, we are at the threshold of a further historic enlargement of the european union. the accession of ten new member states, scheduled for may 1st 2004, is of great political importance and also has non - negligible economic implications. looking into the future, there are two main challenges for the european economic and monetary union. the first challenge consists in strengthening the hitherto developed architecture and culture of stability, the second in successively integrating the incoming new member states, and both challenges are certainly inter - linked. regarding the “ stability architecture ”, the legal fundaments of the economic and monetary union have to be transposed appropriately into the treaty establishing a constitution for europe, in order to ensure that the essence of the stability orientation of the economic and

. moreover, they shall treat its exchange - rate policy as a matter of common interest, as the functioning of the single market must not be weakened by real exchange - rate misalignments or excessive nominal exchange rate fluctuations. from my point of view, it is vital for the new member countries to perform catching - up real growth that permits their income - per - capita levels to gradually approach the average income level in the present eu member countries. therefore, economic policies of the new member countries and any further steps in monetary integration should be oriented towards achieving real and sustainable nominal convergence, as both convergence processes are complementary to each other and should be pursued in parallel. the speed of further monetary integration must not compromise its quality and there will be no uniform appropriate speed, due to differences in the economic situation among new member countries. decisions have to be taken in accordance with the legal fundaments on a case - by - case basis, and, simultaneously, equal treatment between new and current eu member states must be ensured throughout the whole process. the acceding countries are in midst of an integration and catching - up process, and their equilibrium exchange rates will be subject to gradual changes and shocks over time. therefore, any premature euro area participation has to be avoided. this corresponds to the economic reasoning behind the treaty provision that the commission and the ecb have to examine the achievement of a high degree of sustainable convergence in their convergence reports to the council before a decision will be taken on any new member state ’ s adoption of the euro. ladies and gentlemen, i am sure that the participation of the new member countries in the stability architecture of the economic and monetary union from their accession onwards will decisively contribute to enhancing the success of emu into the enlarged european union. therefore, i am looking forward to this new era, which lies in front of us, characterized by a larger number of member states and, in terms of ideas, by an even larger potential of human beings. for the eurosystem, this new era will be personalized by the new president of the ecb, mr jean - claude trichet, whom i wish all the best, indeed. thank you very much for your attention.