Even though Switzerland is not a member of the European Union, it is deeply embedded within the European framework. There are still good reasons why Switzerland has remained outside of the EU. By signing the bilateral treaties, however, Switzerland has secured sectoral access to the European single market. The imminent EU eastward enlargement presents both new opportunities and new challenges for our country.

Globalisation and the liberalisation of the international financial markets have also led to some profound changes and major upheavals in the Swiss financial centre. Last year in particular will go down in history as an extremely difficult year. Given the delayed economic upswing, the financial sector will continue to be under pressure as well.

The Swiss National Bank's experience with its new monetary policy concept has been consistently positive and has enabled it to proceed with its successful monetary policy of the last ten years. Switzerland will therefore continue to enjoy price stability and above-average employment figures.

Experience gained with the European single currency so far has also been positive throughout. The initial misgivings when the euro was first introduced have all proved to be unfounded. The National Bank's room for manoeuvre has not been compromised, and it has become clear that an independent monetary policy is still viable even in a small and open economy.

The current economic situation continues to be dominated by downward risks. With the structural adjustments of the past few years Switzerland should nevertheless be well positioned to profit from the next global economic recovery.