catching - up process, both in europe as a whole and on a global level, as we cannot afford the persistence or even widening of the existing gaps between poor and rich countries. moreover, a balanced and consistent policy - mix will be of crucial importance also for the transition countries in their catching - up and integration efforts. in that respect, i am glad that this conference provides an excellent opportunity to review the policy challenges the transition economies face in the most important fields of economic policy. … let me briefly touch these fields, which range from microeconomic reforms over macroeconomic policies to integration policies. firstly, structural reforms are the key to long - term success. existing productive capacities have to be reshaped, and new ones have to be built, above all in the service sector. in particular, financial services, which were practically non - existent when transition started a decade ago, have to be strengthened further. developing structures and institutions of financial intermediation is the prerequisite for ensuring the high level of productive real investment necessary for high real gdp growth. more broadly, structural convergence is a conditio sine qua non for successful transition and it is an indispensable basis for sustainable macroeconomic stability. secondly, in the field of macroeconomic policies, i would like to underline the importance of formulating and implementing stability - oriented, sustainable and consistent fiscal and monetary policies. to keep the accession process manageable even now that the union is negotiating with a comparatively large number of countries, it will be essential to key the pace of negotiations as objectively as possible to the further progress of the candidate countries toward fulfilling the conditions for eu membership. this involves two aspects : first, the speed of enlargement must not compromise its quality, and second, differences between the countries in the two former groups of candidates must be taken into consideration if there is a factual reason to do so. an overly ambitious approach which is not adequately underpinned by developments in the real economy may lead to losses in credibility or even turn out to be counterproductive to stability and to the long - term catching - up process. from my point of view, it is clear that adequately designed stability - oriented policies facilitate structural change. in that way, prudent efforts towards stabilization and structural change can reinforce each other and will foster the catching - up process. … turning to monetary policy, i am convinced that a sound stance and conduct can best be achieved if the central bank is fully independent. central bank

duties or if he or she has been guilty of serious misconduct, with the possibility of appeal to the european court of justice. • financial independence, in essence, denotes that central banks have to be in a position to avail themselves of the appropriate means to ensure that they can properly fulfill their escb - related tasks. those applicant countries which engaged in accession talks with the european union in 1998 already dealt, in detail, with the issue of central bank independence during the membership negotiations last fall, when the chapter “ economic and monetary union ” was on the agenda. progress in the candidate countries on this issue is being monitored very closely by the european union at large and by the european system of central banks in particular. … let me draw the conclusion that the key challenge facing the applicant countries in the next few years, consists in strengthening their market economies and their competitiveness by firmly pushing ahead with structural reform and by subsequently adopting the community acquis in the process. only on this basis will the eu candidate countries from central and eastern europe be able to attain durable and sustainable macroeconomic stability, and only by taking these steps will they ultimately be able to fulfill, in a lasting manner, the prerequisites for participation in the euro area. thank you very much for your attention.