jorg asmussen : economic convergence across central, eastern and south eastern europe – achievements and challenges speech by mr jorg asmussen, member of the executive board of the european central bank, at the conference on european economic integration ( ceei ) 2013 “ financial cycles and the real economy – lessons for cesee ”, vienna, 18 november 2013. * * * dear ewald, good evening ladies and gentlemen, it is a pleasure to be here with you tonight. i would like to thank the oenb for the invitation to share some thoughts on the region, on which the oenb has developed analytical excellence that is beneficial to the entire eurosystem. i will focus my remarks on selected experiences of countries in central, eastern, and southeastern europe on their path of economic and institutional convergence towards the rest of europe. i will argue that both the successes and the challenges associated with the convergence process point to two basic lessons. first, that we should never relax in the pursuit of domestic policies oriented towards financial stability and sustainable growth. and second, that we need not just more, but also better european integration. in what follows, i will use the term western balkans to refer to the six eu candidate and potential candidate countries in the region : albania, bosnia and herzegovina, kosovo, the former yugoslav republic of macedonia, montenegro, and serbia ]. i will use the term central and eastern european countries to refer to seven eu member states outside the euro area, namely bulgaria, croatia, the czech republic, hungary, lithuania, poland, and romania. and i will refer to the two groups of countries taken together as central, eastern and south - eastern europe. i. the good experiences with convergence if you had to pick three “ good experiences ” which countries in the region have made over the years in terms of convergence, what would your choice be? 1. increasing living standards for me, the first good experience i would bring home is the improvement in the region ’ s living standards : between 2000 and 2012, real per - capita gdp, adjusted for differences in purchasing power, increased on average by close to 50 per cent both in central and eastern europe and in the western balkans. in lithuania, per capita income, measured in this way, increased from 35 per cent of the euro area average in 2000 to 65 per cent in 2012. on the other side of the spectrum, the living standard in the former yugoslav republic of macedonia increased only from 24 per cent of the euro area average in 2000 to

. it is within this context that i appreciate the commitment of euro area member states, made on the occasion of the last european council meeting, to take determined and coordinated action, if needed, to safeguard financial stability in the euro area. let me also take advantage of my presence in front of the european parliament to lay out what i already mentioned in the hearing before the economic and monetary committee on monday. it is the intention of the ecb ’ s governing council to keep the minimum credit threshold in the collateral framework at investment grade level ( bbb – ) beyond the end of 2010. in parallel, we would introduce, as of january 2011, a graded haircut schedule, which will continue to adequately protect the eurosystem. i will provide the technical details when reporting on the governing council decisions of our next meeting on 8 april. conclusion the introduction of the single currency just over a decade ago represents the greatest achievement in the history of european integration to date – a process that has ensured six decades of peace and prosperity in europe. the global financial crisis has brought fresh challenges to which we in europe have all risen. our monetary union and our very close ties, inside the single market, with all eu member states ’ economies have prevented the crisis from being compounded by currency crises, as in the traumatic experiences of the early 1990s. today, europe faces further pivotal decisions. our common task is to ensure continued peace and prosperity, to make our union an even more attractive place to live and work in. for this purpose, we need strengthened surveillance and strengthened cooperation. we also need to revive the sense of common purpose, the shared ideals that motivated our founding fathers. their endeavour was visionary and all what we see in today ’ s world confirms their lucidity. thank you for your attention.