a macroeconomic imbalances procedure. greater automaticity in the implementation of the sgp is needed when unsustainable policies put the stability of the euro area as a whole at risk. credible economic governance needs to be consistent and predictable. it also needs to be backed by timely, tough sanctions to encourage compliance. fiscal surveillance should set ambitious benchmarks for excessive deficit and for setting the adjustment path towards a country ’ s medium - term budgetary objective. the liquidity dry - ups and contagion risks also call for stronger backstop mechanisms, to provide significant, albeit temporary, liquidity assistance. stronger financial supervision at euro area level is also essential. finally, national authorities need to take ownership of their european commitments. this means anchoring eu rules in their national legislation and making them mandatory and being held to account by domestic parliaments. economic governance is not only about preventing crises, but also about creating the conditions for economic growth. at present, this is a major challenge requiring greater coordination across the euro area. projections of the euro area ’ s long - term growth prospects remain weak, depressed by the fiscal burden of age - related expenditure, slow productivity growth, and on going debt sustainability challenges. i agree with recent comments by professor rogoff that europe needs to do more to reverse this trend. it is essential to give renewed impetus to a comprehensive and ambitious programme of growth - enhancing structural reforms supported by intensive monitoring and follow - up. let me conclude. it is precisely against the backdrop of the challenges stemming from the current crisis that we can fully appreciate the invaluable contributions of scholars like kenneth rogoff. i extend my sincerest congratulations to him as he receives the 2011 deutsche bank prize in financial economics, a well - deserved recognition for his work. bis central bankers ’ speeches

months of october, november and december 2008. the challenge this poses is in finding a balance between maintaining sufficient liquidity in the banking system as well as keeping inflation at bay. measures are being taken to ensure that government spending agencies effectively and efficiently absorb all budgeted funds on the specific programs to ease liquidity conditions. what policy measures have been taken so far and what needs to be done going forward? as the global financial centers seemingly headed towards a meltdown in september / october 2008 and this manifested through depreciation pressures on the uganda shilling / dollar exchange rate, government of uganda adopted a number of measures, including : • the review of the fiscal program to accommodate lower domestic revenue compared to the june / july 2008 budget time. the view was that provided the revenue shortfall was moderate, it would be manageable albeit translating into a higher fiscal deficit and thus pressure on interest rates. but any additional spending pressures would need matching spending cuts in other areas so that the public finances would not be an additional source of strain on the economy at this difficult time. • re - calibrating the government's liquidity management program to assume lower private capital inflows than in recent years. • revising the inflation and balance of payment outlook consistent with the latest developments. • adjusting the sterilization mix to emphasize preserving uganda's foreign exchange reserves. official reserves currently stand at us $ 2. 2 billion a level that is sufficient to cover over 5 months of future imports of goods and services. • given the uncertainty about the safety of some banks abroad, the bank of uganda also took precautionary measures by investing in instruments issued by g7 governments and multilateral institutions. in addition, the bulk of reserves are being held with central banks rather than commercial banks. policies going forward the global world recession is a threat to uganda's strong economic growth performance of recent years as well as its plans to scale - up infrastructure spending. but reflecting the prudent policies of recent years, we are in a good position to weather the storm including on account of the planned increase in public investment. specifically, development expenditures are targeted to increase from u sh 1, 400 billion actual spending in 2007 / 08 to close to u sh 2, 900 billion that was provided for in the 2008 / 09 budget. if effectively implemented fully, this would translate into a 4 percentage points of gdp increase in public investment – a much bigger stimulus to the economy than, say, the stimulus package in the united states