He exclaimed: “People here in the rural communities are shocked and astonished to hear that the Norwegian people were within a hair’s breadth of losing their currency, after the enormous sacrifices they had made, and being given a new one instead with all the terrible disadvantages and problems that would inevitably have accompanied it …” 3 The cantor’s joy was to be short-lived. Norway joined the Scandinavian Monetary Union only a year later. The speciedaler was abandoned and the krone took over. The advantages of being able to use Norwegian money as legal tender in Denmark and Sweden trumped the symbolic value of the speciedaler. Looking back, Norway’s participation in a monetary union reflected a nation that had become self-assured and that viewed itself as its Scandinavian relatives’ equal. In the 1800s, Norway’s economy and monetary system underwent extensive changes. Increased trade and economic progress required a more advanced monetary system. A banking system developed, initially in the form of savings banks that extended credit based on their members’ deposits, followed by the emergence of commercial banks. By the end of the 1800s, Norges Bank’s role had changed: from being Norway’s only bank, it was now the bankers’ bank. 2  Henrik Wergeland (1834): Speech at Eidsvoll, “Til forfædrenes minde” [In memory of our ancestors], Samlede skrifter [Collected Works], Vol. 2: 1834–37. 3  Kolbjørn Skaare (1995): Norges mynthistorie [A numismatic history of Norway] (p. 171), Vol 1. Oslo: Universitetsforlaget. 2  BIS central bankers’ speeches  A new Norges Bank Act was adopted in 1892.

Referring back to the performance of inflation, INSTAT data reveal that consumer prices rose on average 2.5% in the first quarter of 2013. Inflation continues to be determined by food prices; their contribution accounts for about 90% of headline inflation. Moreover, food inflation was offset by the lower inflation of non-food consumer goods. Inflation of this category reflected the downward oil price, following its decline in international markets. Also, the price fall of long-term consumer goods provided downward effects, whereas prices of other consumer goods did not change significantly. From the macroeconomic perspective, inflation continues to reflect the weak pressures from the aggregate demand-side and the absence of supply-side shocks. Below-potential growth of aggregate demand leads to underutilisation of production capacities and generates weak pressures on increasing wages, producer prices and profit margins. Under these circumstances, internal pressures on consumer prices appear weak, as reflected by the low core inflation. On the other hand, imported inflation was subdued due to the low inflation in Albania’s trading partners and the stable exchange rate. The most recent data on the real economy are as at 2012 Q4. According to these data, the Albanian economy grew 1.7% driven by expanded activity in the services, industry and agriculture sectors. The activity of the construction sector continued to shrink. Data on economic activity for the first quarter of this year remain limited. Based on indirect indicators, our analyses point to low economic growth, relying mainly on foreign demand, while the domestic demand components continue their sluggish performance.