hope that the decision at last weekend ’ s european finance ministers ’ meeting to provide a massive bailout will provide a lead to solving the problem, and expect that the related governments and financial sectors have developed the capacities for dealing with banking distress, given the learning effects related to the manner in which such distress progresses rapidly. the problem of whether the single currency system that is the euro will continue to exist may be said to hinge on whether a consensus is formed on a project duly recognized since the early days of the system ’ s establishment, i. e. finding a way for members engaging in differentiated economic activities to appropriately share and shoulder the different benefits and costs to each created in the course of their all using a single currency. a pressing issue linked to this is the problem of whether all advanced countries ’ debt problems will be solved and their fiscal policy soundness ultimately achieved. debates surrounding the effectiveness of keynesian policy are not ending. moreover, the expression “ keynesian populism ” is making an appearance. if austerity policies cause economic contraction and thus further exacerbate recession, the issues then are how far fiscal soundness can be compromised, what the means for expanding government finance unlimitedly are, and what the expected effects are. in the past, such discussions took place within the walls of the fiscal authorities ; since the crisis, however, central banks are also participating in these macroeconomic policy discussions. and as i have stressed many times, this is because in overcoming a crisis the role of central banks cannot be neglected. we have to seriously analyze whether, in the absence of recoveries in the u. s. and europe of their own economic growth potentials, there is a possibility of the current crisis being resolved by any other means. with their fiscal spaces exhausted, it is not easy to expect them to come up with any growth - inducing measures on their own. if the quantitative easing policies, termed ltro and qe, are additionally implemented, this should help temporarily in for instance stabilizing the financial markets and enhancing soundness by preventing excessive deleveraging on the parts of troubled banks thanks to their securing of liquidity ; in a situation in which such additional supply of money does not fundamentally lead to credit extension to the private sector, however, i. e. even when liquidity is injected it is only financial institutions ’ soundness indicators that are improved, via purchases of government bonds only, what is critical is how measures can be formulated to enable these improvements to

. the difference between a successful man and a failure is not in the fact that one knows and the other one does not know what it is he should do, but in the fact that one works and the other one just keeps talking. there is hardly another issue in serbia today on which more people agree than the fact that public sector wages have been growing way too much and way too fast and that they should be cut back to a lower level. let me point out that if anybody thinks that this cut should be made at the expense of the national bank of serbia, that is, inflation, he is very much in the wrong. such calculations are totally misplaced. the nbs shall do all it can to prevent such outcome and, let me remind you that we have already shown how successful we can be in that respect! each day that is lost in terms of not decreasing the wage bill in the public sector and public enterprises – and i repeat, wage bill not individual wages – is a lost day. i guarantee that you are not going to see the return to the monetary fairy tale that has lasted for the last four decades and, even if serbia does not get the budget it deserves, there is not going to be an increase in inflation. you may ask, how so? and i say, in the following way. as has so far been the case, the nbs will be forced to increase the level of restrictiveness of the monetary policy ( which means higher repo rate, higher reserve requirement, etc. ) to compensate for the insufficiently tight fiscal policy. the nbs has a clear task – “ to achieve and maintain price stability ”. that task is in compliance with the law, and we shall certainly do our best to achieve it. as far back as in 2001, the nbs gave strong support to provision of credits to small and medium sized enterprises in serbia by acting as an agent for extension of credit lines of the european agency for reconstruction, european investment bank and the government of italy. through these credit lines, end - beneficiaries have so far been granted credits in the total amount of almost rsd 7 billion. in addition, the governor is a member of the advisory body of the european fund for south east europe, the largest fund set up for exclusive use by the countries of the central and east europe, which has almost half a billion euros in its coffers from private investors and the eu tax payers. however, in serbia today, the banking