the target year be postponed. as you are aware, the netherlands is one of the “ core ” countries of the eu, 2 which are known for having achieved favorable macroeconomic performance over a long period. prior to the global financial crisis of 2008 – 09, the fiscal balance of the netherlands had recorded a surplus, and the ratio of sovereign debt to gdp had remained below the eu ’ s 60 - percent threshold. since the crisis, the fiscal balance has shifted to a deficit, with a peak of 5. 5 percent of gdp in 2009 ; however, the netherlands managed to the data used in this speech cover the period up to june 6, 2012. here, i refer to germany, austria, the netherlands, and finland as the core countries. all these countries enjoy current account surpluses and a very high - grade credit rating on their sovereign bonds. bis central bankers ’ speeches reduce that to 4. 6 percent by 2011. owing to the continued fiscal deficit, the sovereign debt to gdp ratio has risen to 65. 2 percent, though this is well below the euro - area average of 88 percent. moreover, the netherlands is, like japan, a net external creditor nation, thanks to its accumulated current account surpluses – a phenomenon that is in contrast with the “ peripheral ” countries of the eu. the unemployment rate in the netherlands is also low at around 5 percent. therefore, i was genuinely surprised by the news about the political turmoil. this event reminded me that fiscal austerity measures are painful even for the core countries, and the dutch public felt frustrated about the recession that had continued over three consecutive quarters from july to september 2011 and the resultant rising unemployment rate. on april 26, nonetheless, the dutch government managed to produce an agreement with some opposition parties on austerity measures worth around €12. 4 billion in 2013 to meet the 3 - percent target ; however, the dutch general election is scheduled to take place in september. the next regime change took place in france – the second - largest economy in the euro area – and that event surprised the world. the first round of voting in the presidential election was held on april 22, 2012, in which mr. francois hollande, the candidate for the socialist party, took a lead over mr. nicolas sarkozy, the incumbent president and candidate for the union for a popular movement. during the election campaign, mr. hollande promised to renegotiate the terms of the eu fiscal compact, which was signed by 25

to promote public understanding of the bank ’ s determination to overcome deflation. it was decided that the goal would be within a positive range of 2 percent or lower in terms of the year - on - year rate of change in the cpi, and the goal was set at 1 percent for the time being. moreover, the bank made it clear that it would continue pursuing powerful monetary easing – through its virtually zero - interest rate policy and continued implementation of the asset purchase program ( hereafter, program ) – until it judged the 1 - percent goal to be within sight ; this was on condition that it identified no significant risk to the sustainability of economic growth, including from the accumulation of financial imbalances. at the same time, the total size of the program was raised by 10 trillion yen – from about 55 trillion to about 65 trillion yen ( chart 26 ). on april 27, the bank decided to increase the total size of the program further by about 5 trillion yen – from about 65 trillion to about 70 trillion yen – following changes in its composition, including the increase in the purchase of jgbs by about 10 trillion yen. 14 regarding the decision to enhance monetary easing in april, i would like to stress that a high degree of uncertainty remains in terms of the bank ’ s assessment, as already explained. the positive signs in economic and price developments that have emerged in recent months do not necessarily imply that the baseline scenario will be realized as projected. even though moreover, the purchases of exchange - traded funds and japan real estate investment trusts were increased by about 200 billion yen and 10 billion yen, respectively. the maximum outstanding amount of the bank ’ s fixed - rate funds - supplying operation against pooled collateral with a six - month term was reduced by about 5 trillion yen, taking into account the recent episodes of under - subscription. in addition, the remaining maturity of jgbs to be purchased under the program was extended from one to two years to one to three years. the same treatment was applied to the remaining maturity of corporate bonds to be purchased under the program. in addition, it was decided that the schedule for increasing the outstanding amount of the program to about 65 trillion yen by around the end of 2012 would be maintained. it was further decided to increase the outstanding amount of the program to about 70 trillion yen by around the end of june 2013. bis central bankers ’ speeches the scenario may eventually materialize, it is still not certain how soon it may do so. considering recent episodes,