The process of monetary cooperation was launched as a response to the potential financial and economic instability stemming from the collapse of the Bretton Woods system. It met with many obstacles and went through several crises. At some point, it came close to being abandoned altogether. But today, the Euro is alive and well: since 2002, it has been the sole currency with legal tender in all countries of the Euro area, providing more than 300 million of European citizens with a new, practical unifying symbol as well as many direct economic benefits. Before addressing the Euro area enlargement issues let me first elaborate on the successes and challenges of monetary integration in Europe. Enlargement should both preserve these successes and help handling the challenges. The first, and most obvious achievement of the Euro, is price stability. Over the last five years, inflation has stayed broadly in line with the price stability objective set by the European Central Bank, i.e. inflation below but close to 2% over the medium-term. Gone are the days when European citizens had to worry about the purchasing power of their savings. This stability goes beyond the behaviour of prices. Inflation expectations themselves have been remarkably stable, including during the recent period when oil prices jumped to new highs. This, by itself, illustrates the credibility achieved by the Eurosystem. Second, the ECB’s clear priority of price stability has reduced the risk premium incorporated in long term interest rates.
-  On the labour market, reforms should aim at protecting the persons, rather than the jobs. Professional mobility can be accompanied without blocking changes, while further progress can be made at improving risk sharing among employers and employees and fostering education. The gains from taking such steps are only reaped in the long run, while the costs are paid in the short run. In addition the gains can be seen as small from an individual point of view because widespread across a large number of agents, while the costs are more visible, concentrated on fewer beneficiaries who lose their position. This means that the reforms have to be well explained and well designed. Besides, a healthy public finance situation is seen as one of the prerequisites for the success of structural reforms: the degrees of freedom are also limited in that respect. In this regard, modernising public administrations can be a key element to ensure control over expenditure and budgetary consolidation. Appropriate monetary policy has a limited, although essential, role, insofar as it can help create favourable conditions for reform by insuring a stable price environment and therefore reducing overall uncertainty. Taking into account the achievements and the prospects for further reform in the present Euro area, what are the challenges facing the New Member States in the process of convergence and what are the prospects for a successful Euro area integration? In contrast with some gloomy predictions made ten years ago, the Euro is a success story.