This is based on the framework established by the Stability and Growth Pact: the budgets of the member states must be balanced or show a surplus during at least several consecutive years and in no year must the deficit rise above 3% of the GDP. Besides budgetary policy, most other economic policy sectors (e.g. labour market policy, structural policies, etc.) are coordinated between the members states and institutions. •  The economies of the European Union member states are closely intertwined. Of the external trade of the EU, some 65% is with other member states, and only a third with the rest of the world. The more the economies of the member states depend on each other, the greater the gain arising from the single currency. Then it will also be unlikely that economic  BIS Review 26/2004  5  growth in some member states might be significantly slower, which could potentially threaten the stability of EMU. What does such a framework mean for the future of the European Union? Above all, economic success of the European Union - hence also of Estonia - depends on whether the economy in Europe manages to be sufficiently flexible and competitive so as to utilise the opportunities offered by the single currency and attract more investments than before. •  Economic flexibility is the trump card Estonia as a small country holds in the European Union.
If the aim of the upper secondary school is to send students on to higher educational establishments, the percentages of those admitted to universities should be publicised on a permanent basis. This requires the state to take action. •  Developing an INTEGRAL framework for supporting innovative activities - including measures related to labour quality and promoting innovation as well as venture capital funds helping to implement good ideas in manufacturing - similarly requires contemplation and support by the state. I say again that our approach should be integral and not dispersed between different competing projects and agencies. Now, on the threshold of the European Union, it is the most appropriate and necessary time for that. Several plans and projects in that direction that can serve as a foundation are about to be completed. Also Finland's SITRA has offered us help. Ideally, I would like to see regional cooperation between the Baltic Rim countries in that area similarly to the work that has been successfully launched in the financial sector. And perhaps we might find an opportunity to rely also on pan-European structures. •  Let me remind you that Knowledge-based Estonia, the research and development strategy for 2001-2006, was approved by Riigikogu as early as in 2001. How much of it has been implemented by today? One thing is sure: more could have been done - and perhaps in a more coordinated manner. Time does not wait.