, is likely to face inflationary pressures that could derail the economy from a sustainable convergence path after euro adoption. top priority must therefore be given to the sustainable economic convergence of the slovak economy towards the more mature countries of the euro area. this certainly cannot be seen as an automatic outcome of joining the euro area – indeed, it will require major efforts in the years to come from all parties concerned. we appreciate the fact that the slovak authorities have firmly committed themselves to pursuing appropriate supportive policies – ones which aim in particular to maintain sustainable convergence, underpin external competitiveness and strengthen economic resilience. fulfilling these commitments is vital for the slovak economy to function smoothly within the euro area. let me stress three areas that we consider crucial for preserving sustainable convergence in slovakia. firstly, after euro adoption, when monetary policy is no longer autonomous, a rigorous and credible implementation of fiscal policy in line with the stability and growth pact commitments is essential to contain inflationary pressures in the economy. to this purpose, the fiscal adjustment in structural terms must be at least 0. 5 % of gdp per year until the medium - term objective is reached in 2010. secondly, the functioning of slovakia ’ s labour market must be further improved and the high structural unemployment reduced. while the reform of the educational system might help to reduce unemployment in the medium term, making labour legislation more flexible as well as eliminating existing wage rigidities would help to alleviate pressures in the labour market more rapidly. any temptation to introduce wage indexation schemes should be resisted ; social partners should focus on labour productivity growth and competitiveness as the main factors in any wage adjustments. refraining from any kind of mechanical wage indexation is particularly important today to avoid any spillovers from the recent more elevated levels of inflation to wages and salaries. thirdly, the authorities must also focus on further improving the business environment in slovakia in order to enhance productivity growth and continue to attract foreign capital. the strengthening of the competitive environment should be seen as a prerequisite for any further initiatives. commitment by all policy actors is key. only a decisive approach by the government and social partners in these areas would, in our view, help to keep slovakia ’ s inflation on a sustainable track in the future. the slovak authorities must be ambitious in pursuing sound economic policies that, jointly with the stability - oriented policy of the ecb, will bring sustainable economic growth, job creation and social cohesion for the people of slovakia. 3. preparations for the changeover the ecb values the

##ulate you all on your achievements during the run - up to the euro in slovakia. i ’ d also like to take this opportunity to urge the slovak authorities to continue with their prudent economic policies. in other words, to remain on the path of fiscal consolidation so as to improve the sustainability of public finances and also to keep working on structural reforms. these policies should address the real challenges that lie ahead. even though it is a little while until the euro becomes a reality in people ’ s wallets, i am looking forward to welcoming narodna banka slovenska to the eurosystem, and slovakia to the euro area. vitaj slovensko! welcome, slovakia!