CELEX: 31974D0374
Language: en
Date: 1974-07-04 00:00:00
Title: Council Decision of 4 July 1974 on the adjustment to the guidelines for economic policy for 1974

22. 7. 74                         Official Journal of the European Communities                  No L 199/ 1
                                                           II
                                     (Acts whose publication is not obligatory)
                                                   COUNCIL
                                                 COUNCIL DECISION
                                                    of 4 July 1974
                  on the adjustment to the guidelines for economic policy for 1974
                                                     (74/374/EEC)
          THE COUNCIL OF THE EUROPEAN COMMUNITIES,
          Having regard to the Treaty establishing the European Economic Community, and in
          particular Article 103 thereof ;
          Haying regard to the Council Decision of 18 February 1974 (') on the attainment of a
          high degree of convergence of the economic policies of the Member States of the Euro­
          pean Economic Community, and in particular Articles 1 and 2 thereof ;
          Having regard to the proposal from the Commission ;
          Whereas the Council agrees with the analysis of the economic situation set out in the
          communication from the Commission of 27 March 1974 concerning the adjustment of
          the economic policy guidelines for 1974,
          HAS ADOPTED THIS DECISION :
                                                       Article 1
          The Member States shall pursue their economic policies in conformity with the guide­
          lines which are specified in the Annex.
                                                       Article 2
          This Decision is addressed to the Member States .
          Done at Brussels, 4 July 1974.
                                                                        For the Council
                                                                         The President
                                                                     J. SAUVAGNARGUES
          (') OJ No L 63 , 5 . 3 . 1974, p. 16 .
 ---pagebreak--- No L 199/2                         Official Journal of the European Communities                             22. 7. 74
                                                         ANNEX
                                    GUIDELINES FOR ECONOMIC POLICY
                                             A. GENERAL GUIDELINES
The current situation requires that Member States             They are all the more likely to reach agreement where
short-term economic policies aim at the following             income restraint is accompanied by social measures.
objectives :                                                  Various steps can be envisaged, according to the
                                                              specific situation of each member country. A special
                                                              effort should be made in certain countries to bring all
     restructuring their economies to adapt them to the       the various forms of wealth, in particular housing,
     changes in the external situation ;                      within reach of all sections of the population . Such a
                                                              move could well strengthen the propensity to save of
                                                              households.
     stepping up the fight against inflation in order to
     preserve purchasing power ;
     achieving a reduction in the balance of payments
     deficit ; in the case of those countries whose           The number of workers likely to be forced to change
     external situation had deteriorated appreciably          their jobs will be noticeably higher than in the past.
     even before the crisis, this reduction must be           The aim should be' to safeguard employment by
     substantial .                                            improving the flexibility of the labour market, rather
                                                              than preserving jobs which are no longer productive.
                                                              To this end, the infrastructure for retraining workers
                                                              should where necessary be considerably strengthened
                                                              and expenditure thereon should be increased. It is
The fulfilment of these requirements may in certain           above all during the period of readaptation that the
cases endanger full employment. Although this is also         worker should be guaranteed a level of income not too
a priority objective it is necessary to stress that in the
                                                              far below that which he previously enjoyed. This high­
current situation it cannot be achieved by a general
                                                              lights the importance of a system whereby a substan­
stimulation of nominal internal demand, but rather by
                                                              tial proportion of normal income is maintained
means of specific actions.                                    during retraining. At a time when the level of voca­
                                                              tional training and retraining required is expected to
                                                              improve, Member States should be prepared to
                                                              increase the effectiveness of the Social       Fund . In
In order to attain all these objectives, some means of        member countries where unemployment benefits
regulation of overall demand is indispensable, but it         represent only a small fraction of money incomes, the
must necessarily and especially in present circum­            amount available for this purpose will have to be
stances be incorporated into a longer-term view. The          increased . In any event, Community solidarity must
changes to be brought about are of such size that they        come into play to prevent a flow of labour back to
 imply action in depth which needs to be undertaken            Italy and Ireland, where the employment problem is
 forthwith in order to achieve results within a reason­
                                                               already particularly acute .
 able period of time . The sacrifices they will require
will be the more acceptable the better they are distri­
 buted over time and between the different socio­
 economic groups.
                                                              A movement towards the necessary restructuring of
                                                               production will undoubtedly come about spontane­
                                                               ously ; it must, however, be encouraged and certainly
 The essential problem in the next few years is to main­       not resisted . All the steps to be taken should thus be
 tain a substantially slower growth rate in private expen­     designed to encourage investment in the energy sector
 diture than in gross national product. Only in this way       and the other priority areas.
 will it be possible to free the necessary resources to
 enable the additional investment and export effort to
 be made . To this end the expansion of all money
 incomes must be slowed down , in order to avoid               Special efforts are necessary, as regards research and
 adding to inflation and the disequilibrium of the             investment, with a view to achieving a more rational
 balance of payments. This objective can only be               use of energy and developing sources of energy
 attained where management and labour engage in                capable of guaranteeing the Community a certain
 constructive dialogue .                                       degree of autonomy in the longer term, at a
 ---pagebreak--- 22. 7. 74                          Official Journal of the European Communities                           No L 199/3
reasonable cost. It would thus be possible to soften the      tionary tendencies in these countries while assisting
impact of the higher price of oil on the balances of          the countries with large deficits in their efforts to
payments and real incomes. In order to speed up the           improve their balance of payments situation .
process of substitution and to save energy, the rise in
the price of oil will have to be reflected in the struc­
ture of domestic prices of oil products.
                                                             Economic policy in the first group of countries will
                                                              have to be, if necessary, so contrived as to act on the
                                                             growth of demand principally by applying budgetary
The far-reaching transformations which must be made           measures. Should the expected budgetary stimulus not
in the Community's energy patterns require consider­          be sufficient to sustain growth, an easing of the
able investment which, in some cases, involves a high         burden of direct taxation or additional expenditure
degree of risk. On a Community scale, more possibili-.        should be considered, especially with a view to
ties exist for research into new schemes and at the           providing extra incentives for investment in the
same time the burden would be less. The Community             energy sector. A relaxation of monetary restrictions
has a duty to exploit fully the advantage offered by its      would not, however, seem advisable at present except
size by implementing a common energy policy.                  where necessitated by the exchange-rate relationships
                                                              within the Community and at international level.
The measures proposed here will help to solve the
main balance of payments difficulties within a reaso­         In the second group of countries the constraints
nable period of time. However, this can only be done          imposed by the balance of payments situation and by
by a gradual process of adjustment, more especially as        the vigorous upsurge in costs and prices call for poli­
an overall balance must be restored at world level . In       cies to restructure demand aimed at improving the
the meantime, the solidarity of the member countries          external balance. To stimulate exports, the economic
must enable those with the largest deficits to obtain,        policy of these countries will have to aim at reducing
by means of Community machinery already existing              the growth of domestic demand to a rate considerably
or to be set up, at least part of the necessary finance.      below the expansion of productive capacity by the end
                                                              of 1974.
 Differentiation is certainly necessary between the
various measures to be taken as part of a conjunctural        In the countries which before the oil crisis had
 policy. Against a background of close coordination           already noted a sharp deterioration in their balances of
this must take account of the initial situation and the       payments on current account, an important part will
 prospects in each member country. Inside the                 have to be played by monetary policy in order to help
 Community one can, indeed, distinguish two groups            make the necessary adjustments. The restrictive line of
of countries according to their external payments situa­      monetary policy must therefore be maintained or even
 tion and their inflationary tendencies. The first group      tightened. The reduction in domestic liquidity as a
 comprises Germany and the Benelux countries, whose           result of the deficits on current account will help in
 current accounts in 1974 will be in surplus or close to      this respect. Interest rates should be maintained at
 equilibrium, despite a sharp deterioration . The second      high levels, as much to ensure an adequate level of
group comprises the other countries (Italy, the United        real rates as to maintain a sufficient margin over the
 Kingdom, Denmark and, to a lesser degree, France              rates obtaining on the main foreign markets. The
 and Ireland), which will have to cope with heavy defi­       expected deterioration in the budgetary positions will
 cits on their external balances and very rapid price          have to be curbed either by cutting back the growth of
 increases .                                                  expenditure or by increasing taxes. In this connection
                                                              the stepping up of exports and investment in the
                                                              energy sector are to be considered as priority aims at
                                                              the expense of consumption expenditure by the
 In the countries included in the first group, especially      public authorities and households. With regards to the
 Germany, the authorities responsible for economic             fight against rising costs and prices, a stabilization of
 policy must make sure that the recovery expected              exchange rates would appear desirable.
 between now and the end of 1974 becomes more
 marked towards the end of the year without however,
 exceeding the growth of productive capacity. It is
 desirable for the growth in real gross national product      The economic policy described above will have more
 in these countries to reach a rate of about 3 to 4 % by       rapid and more effective results if the main trading
 the end of 1974. The resulting deterioration in the           partners in the Community take similar action . As for
 balance of payments on current account would have             the Community, it should work in this direction
 to be accepted . It would help to reduce the infla­           within the framework of international cooperation .
 ---pagebreak--- No L 199/4                         Official Journal of the European Communities                                 22. 7. 74
                              B. GUIDELINES FOR THE INDIVIDUAL COUNTRIES
In Denmark the main features of the economic situa­           about a 3 to 4 % growth rate in the economy towards
tion in the period up to the end of 1974* could be a          the end of the year. If, however, it should appear that
slowdown in economic activity, an increase in infla­          this objective will not be attained, the Government
tionary tendencies and a deterioration in the balance         should cautiously go about stimulating the economy
of payments on current account which already showed           further, essentially to encourage investment.
a heavy deficit in 1973 .
                                                              The acceleration in budgetary expenditure compared
Economic policy should aim more at restoring equili­          to the initial forecasts, chiefly as a result of the steeper
brium in the balance of payments and curbing rising           rises in wages and prices, the selective measures in
prices and costs. If this objective is to be achieved,        favour of specific industries and certain regions, and
private consumers' demand must be reduced and the             the lifting of the tax restriction, will mean that in
increase in government spending checked. The                   1974, the     Federal   Government and         the  Lander
resources freed in this way should then be directed           together will have a net borrowing requirement of DM
towards exports. The measures adopted recently by              11 000 to 13 000 million, instead of the slight surplus
the Government, which include in particular a reduc­          forecast in the third annual report. The deficit in the
tion in public spending and the introduction of               Federal Government and Lander budgets should be
compulsory private saving, are a first step in this direc­    financed primarily through the capital market - and
tion. However, if these should prove inadequate to            only to a lesser degree by drawing on the 'counter­
bring about the desired reduction in the growth of             cyclical reserves' at present frozen with the Bundes­
domestic demand in money terms it would be neces­             bank.
sary to supplement them by further cuts in public
spending, or new taxes in order to maintain the
budget surplus at a level close to the guidelines for the     The policy on liquidity should continue along the
 1974/75 financial year in the third annual report on          present lines.
 the economic situation in the Community.
                                                               In France, economic expansion will probably remain
 In the monetary field a distinct slowdown in the
                                                               appreciable although somewhat slower compared to
                                                               last year. The strains which affected production capaci­
 expansion of domestic liquidity has been observed
 since last autumn . Care should be taken to see that          ties in 1973 will probably slacken. The situation on
 this tendency is maintained. The authorities should           the labour market should gradually become easier
 continue to concentrate particularly on curbing               during the year. The increase in the prices of
 consumer credit as part of a policy for restricting bank      imported basic products and in particular of energy
 lending.                                                      products will probably give rise to a large external
                                                               deficit. Furthermore, domestic prices are likely to
                                                               continue to rise at an increasing rate.
 After the slowdown recorded in the second half of
  1973, economic activity in Germany remained at a             The economic policy to be implemented in 1974
 relatively high level at the beginning of 1974. Despite       must aim primarily — as part of a medium-term
 the oil crisis a certain recovery in expansion seems          strategy — at gradually absorbing the external deficit.
 probable in the coming months. The rise in prices is          It would be advisable, above all, to facilitate and
 likely to remain rapid.                                       encourage the re-adjustment of productive capacity in
                                                               order to achieve a distinct improvement in the posi­
                                                               tion on external account in 1975. At the same time,
 The authorities nevertheless find themselves with the         the increase in domestic costs should be curbed in
  particularly delicate task of supporting the tendency        order to safeguard the country's competitive position
  towards an improvement in the level of economic               and to ensure the stabilization of the exchange rate.
  activity and at the same time reducing inflationary
  pressures. In this respect the development of the
  balance of payments does not impose any appreciable           In the field of public finance, recent tendencies indi­
  constraints ; on the contrary, a rise in imports could        cate that there will be a budget surplus in 1974 which
  contribute to an improvement in internal equilibrium.         will exceed the level of FF 2 000 million fixed in the
  The effects of the lifting of the tax restrictions intro­     guidelines laid down in the third annual report. Budge­
  duced in May 1973 combined with the expansionary              tary management in the course of the first half of
  pressures resulting from the deficits in the Federal          1974 will have a distinctly restrictive character. If the
  and Lander budgets should be sufficient to bring              trend towards a slowdown in growth should become
 ---pagebreak---   22. 7. 74                           Official Journal of the European Communities                            No L 199/5
  too pronounced, the introduction of fiscal measures to        however, in spite of a faster expansion of exports, its
  encourage investment in priority sectors should be            pace may slow down appreciably as a result of the oil
  considered.                                                   crisis. Little change should occur in the labour market
                                                                situation. The most pressing problems will concern
                                                                the overall equilibrium of the economy ; in this
  It would be advisable to maintain the restrictive bias        respect, it is to be feared that the increase in prices,
  which has progressively been given to credit policy           already rapid in 1973, will accelerate further and that
                                                                the deficit on current account of the balance of
  but without prejudicing those measures necessary to
  promote capital expenditure on adjustments necessi­            payments will increase considerably. The apparently
  tated by the energy crisis. Consumer credit and credit        excessive depreciation of the lira has increased the
  granted for investment in non-priority sectors should         inflationary pressures without alleviating the difficult
  continue to be severely restricted.                           current account position .
  In Ireland, before the presentation of the budget, the
  general outlook for the Irish economy was for a                In these circumstances, the emphasis of economic
  modest resumption of growth following the slowdown             policy should be on eliminating the factors respon­
  experienced in the second half of 1973. No great              sible for disequilibrium . The immediate problem
  improvement in the labour market seemed likely.               facing the Italian authorities is that of rapidly
                                                                achieving tangible results in the form of a distinct
                                                                improvement in the external accounts which cannot
                                                                be allowed to continue on their present trend. Given
  The recent National Pay Agreement would lead to a             the high level of Italy's external indebtedness, a
  large increase in salaries. Prices would continue to rise     distinct improvement in the balance of payments on
  briskly and the current balance of payments would             current account will have to be achieved in the second
  show an appreciable deterioration . A continuation of          half of the year and during 1975. As the depreciation
  net capital inflows was expected.
                                                                of the lira since February 1973 will have its greatest
                                                                effect on the volume of exports next year, economic
                                                                 policy must aim at reducing the total balance of
  To ensure that the economy would operate in 1974 at            payments current deficit in 1975 to not more than Lit
  a level close to the full utilization of capacity the         2 000 000 million . In this respect, it is appropriate to
  Government decided to provide a stimulus in the               recall that within the deficit of Lit 4 100 000 million
  budget presented at the beginning of April. Despite a         forecast for 1974, approximately Lit 2 800 000 million
  reform of the income tax structure and a considerable         are the result of the increase in oil prices. Given that
  advance towards securing greater equity in the distri­         the high current balance of payments deficit forecast
  bution of the tax burden, principally by extending the         for 1974 is the consequence not only of increases in
  tax base and the introduction of a capital gains tax,         the price of oil but equally of internal factors due to
  the budget deficit forecast is substantial . Due to the        the increase in total demand and the rapid accelera­
  delicate  balance    needed    to  achieve   external and      tion of the price spiral, strict control of the growth of
  internal equilibrium it is necessary to adopt a flexible      domestic demand as well as some moderation of inter­
  economic policy. If the capacity of the economy               nally originated cost pressures are necessary from now
  proves to be insufficient to absorb the additional            on . In this connection, urgent action is required not
  stimulus of the budget on internal demand and infla­          only to stabilize the exchange rate of the lira, but also
  tionary pressures become stronger than foreseen it will        to use the instruments of demand management in
  be necessary to revise economic priorities particularly       such a way as to divert resources into productive
  in the context of the execution of the budget.                 investment and, above all, into exports.
  During the second half of 1973 the growth of
  domestic liquidity accelerated. The present restrictive        with respect to budgetary policy all the possibilities
  stance of monetary policy should be continued with            still available should be used to reduce the budget
  regard to the money supply and should be accompa­              deficit for the current year and measures should be
  nied also in the future by selective measures in favour        introduced to bring about a gradual improvement in
  of the most productive investments. The task of the            the public finances of national and local government
  monetary authorities would be made easier by less reli­        and social insurance bodies. During the current finan­
  ance on monetary means for the financing of the                cial year a strong effort should be made to restrict less
  budget deficit.                                               urgent forms of expenditure, especially those directly
                                                                 linked to consumption . At the same time, it would be
                                                                 advisable to support, either directly or indirectly,
  In Italy, last year s strong recovery in demand should         priority investment expenditure, especially where
1 make continued economic growth possible in 1974 ;              linked to exporting activities and infrastructure
 ---pagebreak---   No L 199/6                          Official Journal of the European Cpmmunities                              22. 7. 74
  improvements. Taking into account the supplemen­              The Special Powers Act of 10 January 1974, which
  tary expenditure decided upon since last autumn, the          will remain in force until the end of the year, gave the
  Government's net cash deficit will amount to Lit               Dutch authorities very wide powers in the field of
  9 200 000 million in 1974. Such a figure is a ceiling         incomes policy. In this connection, the imposition of
  which should not be exceeded under any circum­                temporary controls on prices and all incomes, accom­
  stances. To achieve this result, an increase in the fiscal     panied by a reduction in direct taxation on small
  burden seems inevitable. Moreover, the deficit should          incomes seems appropriate in so far as it may help to
  be financed to a large extent by non-monetary means.          curb the rise in wage costs.
  As regards monetary policy, the balance of payments            In Belgium, the slackening of world demand and the
  deficit should contribute to mopping up excess                 rise in import prices resulting from the oil crisis will
( liquidity. On the other hand, the growth in lending            not fail to affect economic growth in 1974. Unemploy­
  must be limited in order to stay well below the ceiling        ment could well spread. The current account surplus
  of Lit 22 400 000 million fixed in the letter of intent        of the balance of payments will be substantially
  addressed to the IMF. It will be necessary, neverthe­          reduced, though still in surplus. In these circum­
  less, within this overall framework to give priority to        stances it is important to grant support designed to
  investments in those sectors clearly oriented towards          increase economic activity in a very selective manner
  exports and energy. The rise in interest rates which           and, given the persistent price and cost increases, to
  will   result from   these restrictions should tend to         take care to maintain the level of activity below
  improve the balance of payments on capital account,            productive potential .
  mitigate import price rises by supporting the
  exchange rate of the lira, and stimulate saving.
                                                                 In the budgetary field, it seems that the reduction in
                                                                 in the deficit recommended in the third annual report
                                                                 and provided for in the budget presented by the
  In the Netherlands, it is expected that the expansion          Belgian Government will be maintained, as the
  of demand and production will be relatively moderate           increase in prices is likely to affect budgetary revenue
  between now and the end of the year but the employ­            as much as expenditure. This nevertheless implies
  ment situation is liable to deteriorate . Prices will tend
                                                                 restrictions on additional expenditure given the struc­
  to rise more sharply. The external balance should de­          tural nature of the budgetary deficit. The need for new
   teriorate, whilst remaining in surplus.                       investment in the energy field should be covered
                                                                 essentially by restructuring expenditure.
  The Government, anxious to maintain a satisfactory
   level of national expenditure, has already announced          A restrictive monetary policy should be preserved.
   policy actions to support demand — especially in the           International trends may, however, cause a rise in
   budgetary field (deferment of the introduction of the         interest rates .
   investment tax in the country's western region, acceler­
   ation of the second stage of the anti-unemployment
   programme adopted last September) and other                    In order to prevent the higher cost of raw materials
   measures were announced on 19 March 1974 (a reduc­             from leading to a persistent upward price-wage spiral,
   tion of income tax with effect from 1 July 1974, an            an active price policy should be maintained and the
   increase in tax allowances for investment, supplemen­         various social and occupational groups should be
   tary expenditure). If all these measures are adopted           persuaded to moderate their claims for higher
   and the measures already decided on at the end of              incomes . In this connection , increases in incomes in
   1973, are taken into account the net borrowing                 certain sectors must not be allowed to set the pace for
   requirement may be expected to exceed by F1 1 100              other sectors.
   million the figure of F1 1 500 million laid down in
   the third annual report. Any further budgetary
   measures which might be taken — especially to                  In Luxembourg, a high level of economic activity will
   increase   investment   —   should    involve  as  far  as
                                                                  probably be maintained during the coming months,
   possible a restructuring of public expenditure without         especially in the iron and steel industry. The upward
   further increasing the deficit.                                movement of consumer prices is likely to gather addi­
                                                                  tional momentum during 1974. The external balance
                                                                  should continue to show a substantial surplus.
   The principal feature of the monetary situation up to
   now has been a substantial increase in secondary
   liquidity. Special factors have contributed to this de­        The outlook for the employment situation is favour­
   velopment. The general stance of monetary policy               able, so economic problems appear less acute than in
   requires no modification for the present.                      some other countries of the Community. Because
 ---pagebreak--- 22. 7. 74                           Official Journal of the European Communities                         No L 199/7
inflation essentially originates abroad, it can only be       An essential condition for avoiding an abrupt halt in
curbed very moderately by internal measures. It does          the expansion of internal demand in the short term is
not seem necessary, therefore, to make any appreci­           to lay the foundations of an agreement on a concerted
able changes to the general guidelines for budgetary           policy for prices and incomes ; such an agreement
policy recommended by the Council in the third                would be all the more desirable in that it would
annual report. Nevertheless, a degree of caution               promote sufficient development of industrial invest­
appears necessary in allocating budgetary resources for        ment to stimulate a strong flow of exports and so
new measures in the implementation of the Govern­              maintain a high level of employment in the longer
ment's social programme.                                       term .
In the United Kingdom, economic trends will be                As for budgetary policy, measures to moderate
                                                               domestjc demand should be introduced following a
strongly affected throughout the rest of the year by
                                                               return to normal economic activity. The budget for
the repercussions of the temporary limitation of the
working week to three days and of the miners' strike.          the fiscal year 1974/75 constitutes an important step
                                                               in this direction . While providing for a reduction in
Even assuming that production losses during the first          the fiscal burden at the lowest income levels, where
quarter are partly made good later in the year, the
                                                               purchasing power has already been sharply eroded by
gross national product in real terms will certainly be
                                                               inflation, and while introducing subsidies in order to
considerably reduced for the year as a whole. The
trend of rising prices could increase sharply during           contain the rise in food prices, the budget aims at
                                                               restraining domestic demand both by a limitation in
the coming months. Prospects for the balance of
                                                               the growth of expenditure and by an increase in taxa­
payments on current account, already in very large
                                                               tion . If during the coming months it appears that
deficit in 1973, continue to give cause for concern .
                                                               domestic demand in nominal terms is rising at a rate
                                                               inconsistent with the required improvement in the
                                                               current account of the balance of payments, additional
Thus, the need to bring the external account back              measures will be necessary in the budgetary field.
onto a sound basis and to protect the foreign exhange          These should aim at preserving productive investment
reserves conflicts with the desire to avoid an exces­          as much as possible .
sively low level of economic activity and a deteriora­
tion in the employment situation. Thus, although the
improvement of the position on current account is a            In view of the rapid and continued increase in the
priority objective, it should be placed within a strategy      principal monetary aggregates, fresh efforts should be
covering a period longer than the current year. In this        made to slow down the expansion of the money
respect, it is anticipated that the beneficial effects of      supply in 1974. However, within the overall frame­
the depreciation of the effective exchange rate of             work of such action, there are grounds for applying
sterling, which has occurred since mid- 1972, will             any restrictions on bank lending selectively, especially
become increasingly important. Judging from prev­              in relation to those small - and medium-sized busi­
ious experience, the full effects on the current balance       nesses which have been most affected by events at the
will be felt in 1975 and subsequent years. From now            beginning of the year, and also where exports are
on, economic policy should have the objective of               concerned. Moreover, the balance of payments situa­
 ensuring that the total current account deficit, in           tion calls for short-term interest rates to be main­
 1975, will be less than £ 2 000 million . This amount         tained at a level appreciably higher than those
would correspond to that part of the deficit which, in          prevailing on international monetary markets. This
 1974, is attributable to dearer oil . The achievement of       policy should contribute to the desirable stabilization
 such an objective requires an economic policy which            of the external value of sterling and to containing
will permit the release of the real resources necessary         inflationary pressures which, in the recent past, have
 for a vigorous expansion of exports.                          arisen from the depreciation of the currency.