Moreover, the pace of internationalisation of the euro area economy has been further spurred by the euro. Allow me to give just one example: the level of accumulated foreign direct investment abroad by French residents since 1999 amounted to EUR 380 billion (i.e. four times its pre-1999 level). Indeed, capital flows between the Euro area and the rest of the world mirror a high degree of attractiveness: over the years 1999-2001, the Euro area has registered total inward direct investments worth 719.8 billion Euros. At this point, one may wonder which conditions are required to ensure the success of the euro and EMU in the medium term. I believe that we have to tackle three main challenges: structural reforms, financial stability and the accession to the EU of new Member States. ***  BIS Review 11/2003  5  Challenges ahead Structural reforms The first challenge is, beyond dispute, to implement structural reforms in the euro area’s economies. Structural reforms were crystallised at the European level in what is called the Lisbon strategy. The first objective of this strategy is to substantially raise our potential output growth. The second is to make our economies more competitive. Implementing the reforms: the Lisbon strategy The European Council meeting held in Luxembourg in December 1997 explicitly mentioned structural policies among the items selected to achieve enhanced co-ordination. The Lisbon European Council, held in March 2000, further enhanced the medium-term strategy to introduce structural reforms in the Union.
Moving forward, we all have a role to play to ensure that boards of financial institutions in Malaysia continue to be served by high-calibre directors who will guide our institutions on a path of sustainable growth in the service of the economy. BIS central bankers’ speeches  3