Your excellences, ladies and gentlemen,

It has been a tradition to begin my kroon anniversary speech with a look at the events of the monetary reform and the circumstances of that time. Certainly, we have to recall the past also today, but compared to the years gone by in another context. In comparison with the previous year, the environment we live in has dramatically changed.

It is almost certain that if we do not spoil anything at the very last moment, Estonia will be a full member of the European Union on 1 May 2004. Surprisingly for so many people, the European Union signifies the beginning of a long path, the reaching of which end allows us to take a long holiday, or may-be even retire. Unfortunately, we have no time for stretching our back or taking a breath. Rather, it would be more proper to speak today about the meaning of being a member of the European Union.

Why do we need the European Union? When speaking about the usefulness and necessity of the European Union, we usually begin with the so-called four freedoms - free trade of goods and services as well as free movement of capital and labour. These freedoms create the growing well-being and what is at least as much important - close contacts of different countries and their people help to avoid conflicts.

When speaking about the usefulness of the European Union we rather often refer to the structural funds of the European Union, which means to the fact that rich areas support poorer ones. In the case of Estonia, the expected sums may reach annually 3% of annually, which is at least half of the government's total investments - after even the EU membership fee is deducted. But even the development aid does not make the European Union unique, although the allocation of money in the European Union seems to be the most important thing for the crafty heater of the barn kiln eager to foster his own interests at the expense of the lord of the manor - a figure traditionally close to the heart of many an Estonian.

When joining the European Union much more important for us are the common values - European culture, democracy and market economy. We have started to take these values for granted and sometimes tend to forget them altogether. I assert that when joining the European Union, very important if not the most important things for us are the cursed Brussels legislation and bureaucracy. Our biggest benefit is international cooperation and committees, which we curse each and every day and at what we look like "a nuisance" of the European Union.

No one has so far discovered a more productive system than democracy and market economy. Resourcefulness of ordinary people - the pillar of market economy - has always been stronger than the brain and measures of compulsion of social engineers. But at the same time, in this strength lies also the vulnerability of market economy. Profit as a target inevitably tempts to take the dominating position in the market. In the absence of control mechanisms the result is harmful for the society and the economy as a whole.

Market economy is strong only if the result is the growing well-being of the majority of its members. To achieve that we need to have the rules, which have been agreed upon at the state level, that is laws and their implementation laws. The more rational and impartial is the legislation and the stronger the institutions applying these laws, the stronger is the state and its society. For us here lies the biggest advantage of the European Union. With the harmonisation of the European Union laws we also have adopted all what is indispensable for a modern society and economy.

If we agree with the above said, it bears much importance to interpreting the role of Estonia as a member of the European Union. The behaviour of Estonia as a candidate country and as a member of the European Union has to be different all together. Several attitudes and assessments originating from the accession negotiations have to be decisively changed when becoming a full member.

The efficiency of the state machine can no more be evaluated only according to "how the Estonian standpoints were defended". The welfare of Estonia as a member of the European Union does not depend on how we can "press our local interests" in Brussels, but how the European Union operates as a whole. A good example of that are the articles written on the European Union in the Helsingin Sanomat and in the biggest Estonian daily newspapers.

It is often said that the small have no say in the matters of the European Union. That is not true. Efficient small countries in the European Union DO HAVE the freedom to speak. The so-far history of the Union - and why not our own first experience - testifies to it.

What does the above said mean to the Estonian state machine? Successful functioning as a member of the European Union takes for granted that the priorities are in place and internal cooperation is more effective. Estonia has no strength to deal with all the matters in the competence of the European Union. Issues in which we are not competent should remain the authority of the European Unity. But more thorough approach has to be given to the issues we indeed want to deal with. To my mind, in the issues significant to Estonia we have to increase the importance of political discussions and decisions, which aim to be well ahead of the processes in the European Union.

To conclude, I would add a couple of ideas about the introduction of the euro. It is possible that the euro will become a legal tender in Estonia in the course of 2006. The as rapid as possible introduction of the euro is a favourable event for Estonia. Even only because we economise the currency exchange costs which are worth almost three hundred million kroons.

The euro is not only the legal tender but also a symbol, which certifies that we belong to the most developed economic region of the world. The implementation of the euro does not only mean the replacement of one currency with another but a confirmation of the economic policy, which is aimed at economic growth. Belonging to the euro area is important for the credibility of our policies and reducing future risks. The euro for us means responsibility to the future generations.

Thank you for your attention.