to enter the eu. in this context, they have to adopt european legislation, to implement eu environmental standards etcetera. when they subsequently prepare for joining monetary union, the accession countries will have to continue the adjustment process in order to successfully converge towards the standards of the euro area. this could take several years after eu entry. however, the potential for structural reform and, therefore, for additional growth is immense. apart from enlargement, closer cooperation in several policy areas is another major theme within the eu. in this respect, monetary union works as a catalyst for more cooperation on economic policies. for instance, tax structures are moving closer together across the euro area. another sign in this field concerns the euro area council of ministers of finance. they have an unprecedented power to fine member states with excessive budget deficits. this council can also make recommendations to member states with economic policies that are inconsistent with broad policy guidelines. they made such a recommendation recently to ireland. it is understandable that within the eu, euro area member states want to cooperate more closely. for example, the euro area ministers of finance have intensified their cooperation in the so - called euro group. with closer european cooperation on monetary and economic issues, it is natural that cooperation on other policies will increase too. however, there is no ultimate goal for closer political integration. some dream about the united states of europe, but europe will not be ready for this within the foreseeable future. others think of a united europe of states. anyhow, there is a growing understanding among european political leaders that europe cannot develop faster than the people want. as i see it, from time to time this can mean that there is a pause at the current level of integration. but there is no moving backward. as it stands, we have to be realistic and focus on issues that have to be resolved at relatively short notice. the main issue now is how to deal with enlargement to eastern europe in terms of decision - making processes. if we want to have both enlargement and closer cooperation on particular issues, there is a need for pioneering groups of member states that move closer together on these issues. that is unavoidable ; whether you refer to these groups as ‘ centers of gravity ’, ‘ avantgardes ’ or in the best tradition of eurocrat - speak ‘ member states of a multi - tiered europe with variable geometry, in concentric circles with a hard core ’. last year ’ s nice summit has cleared

current system. european economic structures are improving. on 1 january 1993, europe created a single market. only six years later, the common monetary policy was put in place. budgetary discipline has improved considerably over these years. more recently, europe has abolished most barriers to competition in the telecommunication and energy sector. reforms are under way on a broad front. for example, at the stockholm summit of eu heads of government last month, new steps were announced to make europe more competitive and knowledge - based. several initiatives relate to removing obstacles to the mobility of workers between european countries. the most practical step forward was the agreement on proposals prepared under the chairmanship of alexandre lamfalussy aimed at taking away the last hurdles to a fully integrated european capital market. subject to the energetic implementation of structural reforms, especially those in the field of labor markets and social security, europe will be able to benefit more from new technologies, and trend economic growth will increase. many countries in europe show encouraging signs that progress on structural issues is under way. take france for example. flexible work schedules have recently been introduced on a broad scale. the government has reduced the state ’ s stake in banking, air transport and telecoms. france has also made a first step in lowering the fiscal burden with a one percentage point reduction in vat last year. there are also developments that point to another direction, for example recent government plans to double redundancy pay by employers. but, on the whole, france has moved from a vicious cycle of higher unemployment and welfare charges to a virtuous growth cycle. enlargement and closer cooperation across europe taking a broader view across europe, one can say that the coming eu enlargement to eastern europe bolsters prospects for structural reforms. currently, negotiations are under way with 12 accession countries. imagine how different the eu will look when they have joined. the eu will then consist of 27 countries ; its population will increase by 30 %, though gdp will increase by only 5 %. it is difficult to imagine that enlargement to the east would occur without reforms leading to lower agricultural subsidies, fewer transfers from so - called cohesion funds and more efficient social security systems. the more so as our policies, in contrast to us policies towards their latin american backyard, are aimed at full integration of accession countries in the eu. however, the new states that we want to welcome to the ranks of the eu must realize they have to bear the main burden of adjustment. their first step is