, the fact that the tie which is created is a permanent one. it is not least for this reason that it is right for the british government, in particular, to place repeated stress on the subject of internal flexibility. i believe that there is unanimity in the debate both in the united kingdom and in germany that economic convergence does not imply uniformity. firstly : it does not imply uniform structures. it is true that competition — precisely in a monetary union — exerts pressure to find efficient solutions, but they do not have to be the same everywhere. even in monetary union, there will still be room for different economic traditions and styles. however, the competitiveness of all the participating economies must be ensured on an enduring basis. secondly : convergence does not imply uniform policies in all areas. on the contrary : a decentralised monetary union calls on national policy to exercise its own responsibility for maintaining competitive economic structures. in key areas, too, powers can indeed remain with the nation states. nevertheless, individual approaches, say in the area of taxes, must not lead to distortions on the markets. thirdly : convergence least of all implies uniform living conditions or equal prosperity in all the participating countries and regions. it may very well be that the way in which the single market and the single currency work will assist less well - developed regions that face up resolutely to competition in catching up quickly and sustainably. but that must happen on the basis of competition. there can be no a priori guarantee of that. iv lasting economic convergence based primarily on market forces is one fundamental precondition for a politically decentralised monetary union. the second fundamental precondition is that the participating countries agree binding rules for certain areas and are prepared to abide by them on an enduring basis. there are rules of this kind — in addition to the general rules for the single market — principally for budgetary policy, where it has a particular direct relevance to the financial markets. some of the rules for budgetary policy are : firstly, the central banks must not finance the budgets. secondly, there is a no - bail - out clause. the community is not liable for the commitments of individual member states. thirdly, the governments have committed themselves to avoiding excessive deficits and, where they exist, to reducing them immediately. fourthly, in normal circumstances the deficit should be close to balance. these rules are not undisputed. some ask whether the no - bail - out clause is

stability in the euro area will be promoted by the common currency. many changes in the political and structural conditions in europe are yet to come. europe is a region departing for more integration and a brighter future. this makes it particular attractive for potential partners. iii the long history of fruitful european - arab partnership leaves us with a unique legacy and forms a basis for us today to revive our commercial, cultural and political links. especially the traditionally good german – arab relations of the past are a call to improve the current cooperation between these two regions. 300 million europeans and about 350 million arabs, including all people in the middle east, need to cooperate closely. a united europe may include east and south - east european states within the foreseeable future. by then, the middle east would be a direct neighbour of the euro area. clearly, good neighbourly relations – marked by peace, fairness and much closer economic interrelationships than today – should be in the interests of both regions. both regions have a lot to offer. the arab region is still gaining in importance for international stability and energy supply. its large role in international finance, not only by the recycling of petrodollars, is being acknowledged. within a couple of years the arab countries will probably also be better represented in international organisations and better integrated in world politics and the global economy. i do know that the european union is seen as a highly instrumental – or even natural – partner in the process of modernisation which arab countries are undergoing at present. therefore, the process of cultural and economic convergence between these two regions should be accelerated. economic and technological integration, cultural respect and political necessity have been identified as its characteristics. conferences like this offer a great opportunity to enhance mutual understanding. may this conference also pave the way for mutual beneficial cooperation.