explain why. first of all, let me recall that over the past decade, the preparations for enlargement have already had a significant impact on the european economy, especially in terms of trade and financial integration between the new and the existing eu members. profound structural changes in the new member states in the past 15 years alongside with sub stantial progress towards the opening of markets early in the transition process ( mainly through the implementation of the so - called europe agreements ) have led to a tremendous increase in trade with the new member states. since 1995, the share of the current new member states in the eu - 15 exports and imports outside the eu ( so - called extra - eu exports and imports ) has increased by an impressive 50 % to more than 13 % and almost 12 %, respectively. likewise, impressive progress has been made during the past decade in terms of financial integration. substantial inflows of foreign direct investment ( fdi ), constituting by far the largest share of total cumulative net private capital inflows to the new member states, stand out in this respect and, in fact, fdi has been a key driver of productivity growth and export dynamics. especially after the russian crisis at the end of the 1990s, fdi flows from the eu - 15 to the new member states increased spectacularly and, according to the most recent data, the share of the current new member states in the eu - 15 ’ s total extra fdi outflows amounts to more than 12 %. the enlargement of the single market is beginning to strengthen the degree of competition as the accession of the new member states increases the number of suppliers within the single market. in addition, an enlarged single market is enhancing the scope for economies of scale. these effects should lower prices and increase productivity, thereby contributing to an increase in the potential growth rate. furthermore, the extension of the single market should increase the range and varieties of products available to producers and consumers. however, these clear benefits do not come automatically. to what extent and how quickly they can be reaped depends critically on whether macroeconomic conditions are stable and the extent to which structural reforms are implemented. from a central bank perspective, enlargement marks the beginning of a process which will lead to the integration of new member states in the euro area, as these countries have no opt - out clause. this integration is taking place in a well - defined institutional framework and comprises several stages. the first phase for the new member states is the

period after eu accession and before joining the exchange rate mechanism ( erm ii ), which is a multilateral arrangement of fixed but adjustable exchange rates with a central parity and a standard fluctuation band of ±15 % against the euro. the second phase starts with entry into erm ii and stretches all the way to the introduction of the euro. as you may know, three new member states already entered erm ii in late june, while this step is still ahead for the other new member states. in this context, let me recall that there are no formal criteria to be met for entry into erm ii. however, successful and smooth participation requires that major policy adjustments - for example relating to fiscal policy and price liberalisation - are undertaken before joining the mechanism. participation in erm ii can be an important means to anchor exchange rate and inflation expectations and to promote discipline. it can help orient macroeconomic policies to stability, while at the same time allowing for a degree of flexibility, if needed, through the wide standard fluctuation band and the possibility of adjusting the central parity. beyond membership in the erm ii lies the adoption of the euro. joining the euro area is an irrevocable decision and thus a step of major importance requiring circumspection and careful preparation. all new member states are expected to adopt the euro in due course once they are deemed to have fulfilled the conditions set by the treaty. as in the past, each country will be assessed on its own merits and its particular situation, based on the principle of equal treatment. therefore, no additional criteria for the adoption of the euro by the new member states will be introduced, while at the same time there will be no relaxation of the criteria laid out in the treaty, including the criteria concerning the sustainability of nominal convergence. concluding remarks let me conclude. as promised six years ago, our new currency has been firmly and credibly established as a stable currency. we have ensured a successful transition to the euro by transferring to the new currency the same degree of credibility as the one of the most credible national currencies that were merged into the euro. thanks to the institutional setting of the treaty and our monetary policy concept, the ecb was borne credible and has managed to maintain its high degree of credibility. long - term interest rates have converged not to the average of pre - emu levels but to those of the best previous benchmarks. yet, there is no reason to be compl