In 2001, average inflation rates in the region as a whole fell to single figure levels for the first time since the fall of the iron curtain and, thereafter, they have continued to decline. In this context, let me highlight that, bearing in mind the potential inflationary pressures that might arise from completing structural reforms, the conduct of a  BIS Review 58/2002  1  monetary policy in the accession countries aiming at price stability should be seen as a medium-term objective, rather than as a short-term target. However, the sound management of macroeconomic policies cannot rely on monetary policy alone. In particular, stability-oriented policies in accession countries need to be supported by sound fiscal policies. Prudent fiscal policy management has been key to making sustainable progress in terms of macroeconomic stabilisation in the accession countries. At the beginning of the transition to a market economy, poor tax collection and governments' limited access to financial markets led to substantial monetisation of public deficits. However, from the mid-1990s onwards, fiscal policy has focused on macroeconomic stability. Therefore, a key lesson from the accession countries' experience is that responsible fiscal policy has been a crucial element in achieving and maintaining macroeconomic stability. Looking ahead, the best contribution that fiscal policies can make to sustainable noninflationary growth is by pressing ahead with fiscal consolidation, as is necessary to ensure the flexibility needed to deal with potential domestic and/or external economic shocks in the medium term.
Willem F Duisenberg: Perspectives on EU enlargement Speech by Dr Willem F Duisenberg, President of the European Central Bank, on the occasion of receiving an honorary doctorate from IMADEC University, Vienna, 14 October 2002. *  *  *  Dear Klaus, Ladies and gentlemen, It is a great privilege for me to be awarded an honorary doctorate today by such a distinguished institution, IMADEC University, in Austria. It is also a great pleasure to hear the kind words of my colleague and friend, Governor Klaus Liebscher. When listening to Klaus Liebscher, who has indeed studied my curriculum vitae in great depth, Shakespeare's words came to my mind and I thought for a moment he had come to bury me, although he has actually come to praise me. I am afraid that this is the fate of anybody whose retirement comes within sight. Nothing but good should be said of the dead, they say. Considering that I am still alive, it is even more gratifying to hear nothing but good things about myself; perhaps with the exception of my addiction to tobacco - an addiction that Klaus and I happen to share. There is one thing I should like to emphasise in the laudation. As Klaus Liebscher has just said, my career has benefited from a “Summe von Zufälligkeiten” that I have been lucky enough to encounter throughout my professional life.