component explaining the dynamics of gdp inflation has been the dispersion in unit labour costs. looking at the unit labour cost developments in more detail, the compensation - per - employee component was generally the most important in explaining inflation differentials. at the same time, productivity growth showed a relatively low level of dispersion across the euro area. this points to relatively significant differences across countries in those components of labour compensation that do not reflect productivity growth. in this regard, part of the differences in price developments may stem then from differences in wage developments, including inertial components of wage - setting rules, such as those caused by automatic indexation clauses of wages to prices, which exist in some euro area countries. to the extent that historical inflation differentials within the euro area seem to largely reflect differences in cost developments across euro area countries, i would like to stress here that the relative evolution of cost competitiveness, as measured for instance by unit labour cost, is a key equilibrating mechanism in the single currency area. concluding remarks ladies and gentlemen, let me make three remarks in conclusion. first, there is no doubt in my mind that the full benefits of the european common market could not be realised without the single currency. i propose to you the simple thought experiment : what would be, today, the us market if we would have had different currencies in california and texas, massachusetts and wyoming? would we call it an “ achieved single market ”? in that perspective, the single currency offers us all the economic benefits associated with an “ achieved single market ”. in this respect, as regards interest rates and exchange - rate risk for each particular economy, there are no “ winners ” and “ losers ”. it is a “ win - win ” game …. all economies, without exception, are benefiting from the very low market interest rates that reflect the credibility of the currency : it is true that this is a considerable additional advantage given to those countries that had previously very high interest rates. at the same time, all economies, without exception, are benefiting from the elimination of exchange risk within the single currency area, which is a considerable improvement, including for those economies that had already very low interest rates, so that not only each economy is benefiting from a much better functioning of the single market itself, but also from a significant improvement of its own monetary situation. it is equally true for germany, for spain, for italy. it is true for the 12 countries forming the euro

of the time off the dynamic stability path ( defined as the range between two standard deviations of the long - term trend ), against australia ’ s 18 percent or brazil ’ s 25 percent. argentina has similar resources and position in the world to these countries, and should have some symmetry with them as regards the impact of external shocks. these phenomena have severely harmed long - term performance, and were not free of charge in terms of welfare : excessive volatility is probably the main reason for our country ’ s economic stagnation in the last three decades. furthermore, our economy is still on its way to its long - term path after exiting an unprecedented crisis, which simultaneously included an institutional breakdown, a huge devaluation, the destruction of the financial system and the default on the public debt. in argentina, the monetary policy transmission channels are just being rebuilt, since credit to the private sector accounts for 12 percent of gdp, still far below the latin american average. moreover, consumer credit reacts weakly to interest rate fluctuations. therefore, the hasty adoption of certain instruments would not only be useless but also hamper their future use. we cannot “ take shortcuts ” ; rather, we must patiently rebuild the power of monetary policy tools. for this reason, comparing the situation of the various emerging countries may lead to wrong diagnoses and policy recommendations. but it was the reinsurance policies ( reserve accumulation and the construction of a solid financial system ) that afforded us high liquidity cushions to be prepared for times like these. what would have happened under the same circumstances with a pure floating exchange rate regime in place? are we prepared for the exchange rate to fluctuate in a short time, as it does in neighboring countries? i do not think so, not yet, given our long history of instability and dollarization. this is something we will learn over time. it is against this background that argentina made the decision to settle its debt with the paris club, which reflects the country ’ s willingness to pay and creditworthiness. this decision is part of a comprehensive strategy to access the debt markets voluntarily — not only for the government but also for the private sector. furthermore, this is a clear proof of what this seminar aims at : an opportunity to turn over a new leaf which is, undoubtedly, a step forward in our country's international financial integration. after paying the debt, argentina will continue to maintain robust international reserve levels as a percentage of gdp, both in comparison with other countries and