kristina persson : sweden and the euro speech by ms kristina persson, deputy governor of the sveriges riksbank, at the swedish chamber of commerce for germany, frankfurt, 27 november 2002. * * * ladies and gentlemen, let me begin by thanking the swedish chamber of commerce for inviting me to this conference on a subject of immediate importance to sweden and of course to the riksbank. this is also a subject in which i have taken a strong interest for many years, as a member of the riksdag and also briefly as a member of the european parliament. we live in a challenging time for the euro area, facing both the present downturn of the global economy, and the future enlargement to include the new eu members from central and eastern europe. it is also a decisive period for sweden, as the issue of emu participation is now coming to the fore. given that we are approaching a decision on a euro referendum in sweden the riksbank will naturally step up its preparations to ensure a smooth and rapid transformation of sweden and the riksbank to the eurosystem. i will here today share with you some views on the development so far of the euro area and on the possible swedish membership. my presentation will naturally focus on the economic aspects of emu, but let me nevertheless emphasize that i personally think that the political arguments for european cooperation remain crucial, especially at times when nationalism is on the rise on our continent. the day after tomorrow, the swedish prime minister will hold consultations with fellow party leaders to come to an agreement on setting a date for a referendum on emu. it now looks as if the referendum will be held in autumn next year. if the outcome of the referendum is a yes, the government will propose the swedish riksdag that sweden should seek an end to the derogation from full participation the stage three of the monetary union. the riksbank will of course play a central role in this process, i will just briefly mention two aspects : on the one hand there is the less spectacular but no less important preparatory work for a transition to the euro. the riksbank has held consultations with the financial sector and with tax and social security administrations. we have estimated that at least 18 months will be required to achieve the transition, if the introduction of banknotes and coins would come later. another, more publicised role of the riksbank, is that of the swedish participation in erm2.

cbc website, a significant number of technical publications, including the monetary policy report ( with a four - monthly frequency, since may 2000 ) ; the financial stability report ( semi - annual, since 2004 ) ; the monetary policy framework document ( updated in january 2007, previous in may 2000 ), and projection models book ( since 2003 ). the cbc publishes monthly mp meeting dates six months in advance ( since 2000 ), the summary of mp minutes with the board members ’ voting decisions ( since 2000 ), and background information on mp minutes ( since july 2005 ). the time lag for the release of the minutes was lowered first from 90 to 45 days, and then to five days before the next monthly mp meeting. 3. monetary policy results in emerging economies and in chile convergence of inflation to developed - country levels there are several empirical studies exploring how emerging economies in general, and chile in particular, have benefited from implementation of an it regime. the evidence shows that it has been very helpful in bringing inflation down to low single - digit levels in emerging economies. it has been shown that the adoption of it has played a leading role in emerging economies ’ successful convergence to inflation levels observed in developed economies ( mishkin and schmidt - hebbel, 2007 ). small deviations of inflation from target in chile it has been shown also that it countries are more successful in attaining their inflation targets than non - it countries ( mishkin and schmidt - hebbel, 2007 ). the introduction of it has also helped chile to attain levels of inflation closer to target levels. albagli and schmidt - hebbel ( 2004 ) provide an international comparison of inflation performance and deviations from targets for 21 it countries. they consider the average relative deviation of inflation from targets since the beginning of it in each country. the results show that chile is the second most accurate it country in hitting its inflation target ( figure 7 ). since adoption of full - fledged it by chile in 2000, average annual inflation has been 2. 9 %, remaining around 75 % of the time within the target range. only 10 % of the time did inflation rate rise above the upper target bound, and 15 % of the time inflation fell below the lower bound ( figure 8 ). inflation targeting and credibility adoption of it has also contributed to the buildup of credibility of monetary policy in it countries. several authors show that the it regime has helped in anchoring inflation expectations at levels close to inflation targets and inflation expectations are more stable than