can stipulate the objective which the riksbank is to aim for. it is worth emphasising, however, that it would naturally be inappropriate for the riksdag to set up objectives that the riksbank is not in a position to fulfil, like that - as we saw earlier - of “ creating jobs ” on a permanent basis. when, but only when, the riksbank ’ s objective has been established, will it be possible to monitor operations effectively. it should be realised that the delegation of monetary policy to an independent central bank is a way of generating confidence that the declared policy of the riksdag and the government will in fact be implemented. in the coming years the rule system for monetary policy will be changed. as an adherent to the maastricht treaty, sweden has undertaken to make changes in, for example, the status of the riksbank ’ s governor. he or she shall not be dismissed except on explicit grounds of serious misconduct, etc. neither is the riksbank to be given instructions from third parties, e. g. government, except in a statutory form. it also looks as though the objective of the riksbank is to be formulated in law and will be price stability. the question of eligibility to serve on the governing board will have to be reviewed. active members of parliament are delegates in sweden, which is entirely contrary to traditions in central europe. the riksbank differs from most central banks in europe in that we are formally responsible for exchange rate policy. the government sees this as a problem in eu cooperation and has therefore instituted an enquiry into exchange rate competence. in the light of what i have just said, these conclusions are not sound. the proposal to transfer responsibility for exchange rate policy from the riksbank to the government makes it more difficult for the riksbank to safeguard the value of money effectively and thereby contribute to a favourable level of interest rates and also - when this does not endanger price stability - to stimulate the economy and employment. in a world with free capital flows there is a direct link between monetary and exchange rate policies. the two policy fields may have conflicting goals. moreover, if the government, via exchange rate decisions, can affect the ability of the riksbank to fulfil the inflation target, there may be misunderstandings about where responsibility for the operation of monetary policy lies. in my opinion it may be reasonable - though this, too, is questioned by

andres sutt : macroeconomic co - ordination and fiscal policy in the expanding eurozone statement by mr andres sutt, deputy governor of eesti pank ( bank of estonia ), at the conference “ thinking euconomy - wirtschaftspolitik europaisch denken ”, berlin, 3 may 2006. * * * the enlargement of the european union with the clear message that all countries without an opt - out clause will, in the future, be also members of the emu, is a most welcome and forward - looking approach in view of an ongoing globalisation and integration processes in the world. eventually, the adoption of the single currency by all member states provides clear benefits for the union as a whole. from the macroeconomic point of view it would support further economic integration and higher growth rates by fostering trade and investments. therefore, euro area enlargement will provide tangible benefits for all european citizens over time. the main policy challenge for both the current and prospective euro area members is to ensure that the best use is made of the monetary stability provided by the framework of the european system of central banks ( escb ). from the perspective of the new member states, the issue at stake is how to maintain the economic structure supportive for sustained growth and rapid real convergence. strong fiscal stance is instrumental in this regard. convergence programs of the new member states should include ambitious medium term objectives to ensure that not only the maastricht criteria are met, but most importantly, the emergence of excessive deficit situations is avoided and the risks of taking recourse to exchange rate adjustments after joining the erm2 ( and, eventually, the euro area ) are minimized. the well functioning single market for all goods and services, including infrastructure networks, as well as pursuing the national reform programmes in the context of the reinforced lisbon agenda is the other pillar for the success of the euro area and for the new member states in particular. estonia has been a de facto member of the euro area since the inception of its independent currency in 1992. fixing the local currency to d - mark, and later to the euro meant that the monetary policy decisions were not made in estonia. estonia's currency board regime implies prudent fiscal stance that has been largely adhered to since 1992, resulting in our general government having accumulated a relatively large net asset position of around 10 percent of gdp. a solid budgetary position and early deregulation of product and capital markets implies that estonia has been