creation incentives, effective welfare safety nets, etc. for this reason, the european council, meeting in luxembourg in december 1997, explicitly mentioned structural policies among the items selected for reinforced co - ordination. the lisbon european council further enhanced the medium - term strategy necessary for structural reform in the union. the following developments are a step in the right direction : the emphasis on deepening the single market, the setting of indicators allowing comparisons of best practices among the member states, and the broad economic policy guidelines which will examine the structural issues closely. the recent european council meetings in stockholm in march 2001 and gothenburg in june 2001 confirmed these guidelines and even added a number of important issues such as the consequences of the ageing population in the european union, the role of biotechnologies in economic growth, and the environment. the european heads of state and government, meeting in ghent a couple of weeks ago, called for an acceleration of the whole process. all european countries must resolutely pursue the reforms they have already initiated. it must be acknowledged that much has already been done, in particular with the implementation of the single market. however, continental europe is still experiencing levels of unemployment that are too high, despite the fact that the unemployment rate has been declining significantly in most of its economies for the past three years. according to the imf, the oecd and central banks, 75 % of unemployment is of a structural nature, i. e. generated by an environment which handicaps job creation. there is no doubt that emu stimulates structural reforms on the labour market. with increased capital mobility and the smooth functioning of the single market, firms will become increasingly sensitive to the general environment in terms of their competitiveness when choosing a particular location in the euro area. the actual process of selecting an investment location within the euro area will be a major incentive for undertaking the necessary reforms. b ) besides structural reforms, a strong emphasis must be placed on competitiveness. pre - euro economic policy required careful monitoring of the balance of payments and the foreign exchange and interest - rate markets. the authorities received constant feedback on key indicators affecting national economic performance and could then react accordingly. these indicators were sensitive, multiple and very reactive. at present, with the advent of the single currency, economic managers must monitor the relevant competitiveness indicators with even greater vigilance, as economic policy errors could have slower and more insidious repercussions, such as rising unemployment and weak growth. the rules of a market

, what the conditions are for the full and ongoing success of the euro in the medium and long term. what is very encouraging in this respect is the fact that, in a number of areas, the euro in itself appears to be a catalyst for meeting these conditions. 1. the euro deepens and completes the single market a ) the euro makes the completion of the single market possible. it enables the productive sector and companies to achieve significant economies of scale, and all european savings to be allocated to the most efficient investments. it also enhances the transparency of the market and boosts competition and innovation to the benefit of consumers. however, the ultimate objective of the single market could not be fully achieved while monetary barriers continued to prevent the free flow of goods, services and capital by imposing unpredictable and erratic exchange rate movements and transaction costs. the last step in this process will be the euro cash changeover at the end of this year ; it will enable not only companies but all our citizens to enjoy all the benefits of using the same monetary instrument throughout europe, just like americans do today with the dollar throughout the united states. b ) moreover, the introduction of the euro brings about a significant change in the economic and financial environment. the introduction of the euro has been a strong catalyst for mergers and acquisitions in the euro area. the european m & a market has been in 2000 one of the most dynamic in the world with operations totalling around one trillion euro. the single monetary policy encourages structural changes in the financial sector, in both the euro area money market and longer - term capital markets. this gives euro area investors greater possibilities and improved financing and investment conditions. – from the beginning of january 1999, cross - border money market transactions increased sharply, to reach almost two - thirds of total activity on all money market segments. the unsecured deposit interbank market — which is mainly concentrated on the shortest maturities — is highly integrated. the integration of interest rate markets within the euro area is a key achievement which deserves to be underscored. eonia and euribor have provided the market with uniform benchmarks that are fully accepted by all market participants. this is reflected, for instance, in the amount of daily transactions and the huge development of the euro interest - rate swap market. these structural changes in the euro area money market have prompted market participants to concentrate their euro cash management activity in order to take advantage of the higher liquidity levels on the secondary market. needless to say, such integration has