and - in some cases - that have proven to be successful. for instance, the telecommunications sector and the hotel and restaurant industry have been liberalised, the cartel laws revised and - last but not least labour market policies have seen changes as a result of the free movement of persons between the eu and switzerland. admittedly, some of these reforms have been implemented only half - heartedly and - what ’ s more - under pressure from outside. this is not surprising given the fact that the level of prosperity in switzerland is still high and that we are not in an acute crisis situation. i am confident that the reform process will accelerate in the next few years, with the european domestic market and globalisation being important driving forces. in order to remain competitive and attractive as a production centre, switzerland will have to break new ground in many areas. the national bank is also confronted with some challenges. one change, which initially caused us considerable concern, has turned out to be a big advantage : the creation of the european currency area. prior to the launch of the euro, there was a great deal of concern at the snb. we could not exclude the possibility that the euro would destabilise the franc, that it would replace it as a means of payment, and that the expectation of the swiss franc being pegged to the euro would mean a convergence of the lower domestic interest rate level with the higher interest level in the euro area. none of these scenarios have become a reality. on the contrary - the euro stabilised the exchange rates to a degree that we would not have thought possible ten years ago. the franc continues to be the means of payment in switzerland, and the usual interest rate differential vis - a - vis the euro area remained. as i have already mentioned, this enabled us to conduct a monetary policy in the heart of the euro area that is suited to the needs of switzerland. and that brings me to my concluding remarks. 5. conclusion switzerland is a small, open country, with few natural resources, which in many ways has become global. the export industry and the financial sector have adjusted well to the new structures and have become global players. the domestic economy and the political structures, however, are straining to make the equivalent adjustments because changes in those areas would often affect vested interests and future claims on the social security system. nor has there been sufficient pressure to act. however, in order for switzerland to stand the test in a dynamic global environment, it must ensure that

jean - pierre roth : switzerland - small, but global speech by mr jean - pierre roth, chairman of the governing board of the swiss national bank, at the swiss - argentine chamber of commerce, buenos aires, 16 november 2004. * * * argentina is a country that fascinates us swiss. at one time it offered my fellow countrymen a new home when they could no longer see a future in switzerland. today, argentina largely attracts business people and tourists. as you know, switzerland is a tiny country in comparison with argentina. situated in the heart of europe, it has more or less come to resemble one huge agglomeration. it is therefore not surprising that many swiss view argentina as a land of space and opportunity. but as to what switzerland could mean to the argentineans is only something i can guess at. perhaps you still associate my country with chocolate and watches. on the other hand, maybe you recently visited switzerland and discovered that a great deal has changed. the country has become more liberal - minded and has begun to question its traditional views - partly of its own accord and partly as a result of external pressures. i am delighted to be here this evening and to have this opportunity to give you a brief overview of the challenges facing switzerland in an era of growing globalisation, under the heading “ switzerland : small, but global ”. 1. switzerland according to common view switzerland has the reputation of being a special case - one which in some ways is slowly becoming a normal case. a good example of this is the development of the public spending ratio. still quite low by international standards at the beginning of the eighties, it has now almost reached the eu average. as in most industrialised countries, the financing of the social security system has become a political hot potato also in my country. at the same time, the wealth gap between switzerland and other oecd nations is shrinking ; and there is no consensus as to how switzerland might boost its economic growth. political debates have intensified and politicians ’ telegenic skills have become an issue there, too. however, certain aspects of switzerland ’ s time - honoured image still prevail. despite all the prophecies of doom, our democracy is under no threat ; the alps still shine in all their majestic glory ; and the swiss people - a fifth of whom are non - swiss in origin - are just as hard - working, punctual and reliable as ever. the level of employment is in fact remarkably high : almost 80