: on 28 october 2004, the heads of state of the 25 member states and the three accession countries bulgaria, croatia and romania - signed the treaty establishing a constitution for europe, which now needs to be ratified by each eu country. as a result of this process of integration in the second half of the 20th century and up to today, the european union has reached a high degree of stability and prosperity. one may safely assume that in the first half of the last century people would not have dared to dream of this period of peaceful convergence across europe. despite the successes, one has to acknowledge that much remains to be done for strengthening and advancing european integration. to single out just some of these major challenges, in march 2000, the eu council of heads of state and government agreed on a new strategic goal, the so - called lisbon strategy, for the european union with regard to the next decade - let me quote - “ to become the most competitive and dynamic knowledge - based economy in the world capable of sustainable economic growth with more and better jobs and greater social cohesion. ” however, there is a lack of clear and decisive progress in achieving these objectives, as recently pointed out by a report written on behalf of the european commission. the subdued pace of economic recovery in the euro area puts the spotlight on its structural inefficiencies with frictions both in the labour and in the product market. the eu single market has to be fully implemented in order to enhance productivity and employment, and overall, economic growth and prosperity. the future european commission, the european council and the governments of the individual member states should now clearly embrace the lisbon strategy and speed up their structural reforms in order to strengthen their international competitiveness, foster economic growth and support employment. the eu, the economic and monetary union ( emu ) and the euro are europe ’ s strategic responses to global competition and associated challenges it poses. emu represents a key step in completing the single european market. today, the euro area has already established itself as a stable monetary anchor in the global economy. however, it is essential not to rest on our laurels. it has to be acknowledged that we have to work hard to keep and assure the success of emu in the future. several governments of euro area member states have repeatedly had difficulties to fulfil their responsibilities and obligations with regard to fiscal rules. for the stability of the euro and the credibility of the monetary union, it is essential to comply with the fiscal rules set by the stability

. ladies and gentlemen, to be sure, our institutions will not become perfect, and their improvement is a permanent process of trial and error. disagreement is a natural human feature, and concerns will be understandable when put into context ; therefore, our workshop will be ready to openly address skepticism as well. we believe that national central banks like the oenb have a responsibility to encourage debate that goes beyond the deliberations of policymakers. not every aspect of the emu reform project that will be discussed during the next two days may seem realistic for the immediate future. in this context, i would like to say a few words about the timing and sequencing of this very important reform project. in particular, i would like to caution against those voices arguing that emu needs to be fundamentally re - built, or even re - established from scratch, within the next two years and arguing that „ otherwise it will fail “. this argumentation, in my view, is extremely dangerous as it puts our already substantial achievements of the past years at stake. offering a contrasting perspective, i would like to recall sir karl popper ’ s piecemeal approach, and strongly argue for a step - bystep approach. as you may know, also the five presidents ’ report prudently envisages two different stages toward completing emu. in a first step, changes would build on existing instruments and make the best possible use of the existing treaties, thus increasing their probability of being implemented in practice. only in a second stage, in a rather long - term perspective, the five presidents ’ report proposes measures of a more far - reaching nature, requiring fundamental treaty changes. we should keep in mind that these days the political feasibility of substantial changes to the treaty seems rather limited, as it is not even clear bis central bankers ’ speeches how many members the eu might comprise in two years from now and as every single member state may veto a suggested treaty change. thus, unrealistic reform proposals cannot be seen as constructive contributions to the project but are rather politically and psychologically dangerous. to put it in the words of ecb board member benoit coeure, “ the eu is a union of democracies and it should be more trustful of the power of democracy to produce the solutions that will address the deep causes of the crisis. ” monetary integration is a means to the ends enshrined in article 3 of the treaty, which states that the european union “ shall promote economic, social and territorial