6 bis - central bankers'speeches and finally there are structural policies. it is not only country specific shocks which present an issue, but also common shocks with diverging effects due to the structural heterogeneity within the eurozone. going forward it will be crucial that the eu works towards structural convergence, which will limit the divergent amplification and transmission of common shocks across the eurozone. let me stress again, that in joining the monetary union a country does give up a certain degree of sovereignty, but that central banks still maintain important tools which can be deployed to smooth idiosyncratic shocks. in our opinion, and in our experience, the benefits of a single currency far outweigh the costs. finally, let me briefly touch upon our current monetary policy, which croatia will soon be part of. just after our adoption of the euro, the economic and financial crisis hit economies around the world, and soon after the sovereign debt crisis also hit europe. in that situation i am convinced that slovenia was better off being part of the broader monetary area that if it were trying to deal with these issues alone. as you might remember, at that time a " new era " of monetary policy started. central banks around the world did not hesitate to expand their balance sheets. the first wave of this was after the economic and financial crisis, and the second was more recently, during the pandemic. as a result, the eurosystem's balance sheet peaked at a previously unimaginable eur 8. 8 trillion at the end of june 2022, and has declined very gradually since. it currently represents a 66 % share of gdp. assets purchased for monetary policy purposes represent around 55 % of total eurosystem assets, while lending operations around 25 % of total assets. if we in the eurozone have been battling too low inflation over the last decade, the issue of high, or even too high inflation emerged at the end of last year, and of course things have only worsened in this regard due to geopolitical tensions in ukraine. with inflation at multi - decade highs in many countries and with risks to the inflation outlook tilted to the upside, several central banks, including the ecb, have started with the tightening cycle of their monetary policy, in terms of both frequency and magnitude of rate hikes. some central banks have also begun to reduce the size of their balance sheets, moving further toward normalisation of policy. monetary policy normalisation means a gradual withdrawal

at the same time, corporate earnings are very high. local government tax revenues have increased substantially. household and corporate borrowing remains high. property prices are rising markedly, and the level of building activity is high. growth among our trading partners is solid, and a number of countries have raised their policy rates. these factors point to a higher interest rate. at the same time, inflationary pressures, with the exception of energy prices, in the norwegian economy remain fairly moderate. the krone exchange rate has depreciated recently, but over a period of several quarters the krone has varied around fairly strong levels. exchange rate movements are difficult to project. the path for domestic and external interest rate does not imply any considerable changes in the krone exchange rate. moreover, the executive board pointed out that the objective of bringing inflation back towards the target and anchoring inflation expectations implies a continued expansionary monetary policy. it is likely that continued high growth in output and employment will result in a gradual pick - up in inflation. the interest rate will therefore be set so that monetary policy gradually becomes less expansionary. projections are uncertain. the uncertainty surrounding the interest rate forecasts is illustrated in the fan chart and indicates that monetary policy reacts to disturbances to the economy. this contributes to increasing the uncertainty surrounding future interest rates, but at the same time contributes to stabilising economic developments. monetary policy cannot fine - tune economic developments, but it can prevent the largest effects from occurring when the economy is exposed to disturbances. in some situations, it may be appropriate to hedge against particularly unfavourable developments. in the baseline scenario, the interest rate is gradually raised to a more normal level. norges bank continuously assesses the effects of interest rate changes and other new information concerning economic developments. thank you for your attention.