of change. it is therefore not surprising that our relationship with europe is a topic of much discussion in my country. 2. switzerland and the european scene for almost six years now, switzerland has been surrounded by the single european currency. and for six years we have been trying to make it clear to our friends abroad that switzerland is nevertheless not an island, but is in fact deeply integrated into europe. approximately 20 percent of our workforce comes from eu member states. a total 60 percent of our exports go to the eu and 80 percent of our imports come from there. a large proportion of the transit travel from the north to the south of europe goes right through switzerland. in order to make this more efficient, we are currently digging a 57 - kilometer - long railway tunnel through the gotthard mountain - an undertaking that is going to cost switzerland a lot of money. so i hope that it will manage to be the longest railway tunnel in the world for a few years at least. the country ’ s economic relations with the european union are governed by the bilateral agreements this comes after the electorate voted against switzerland ’ s accession to the european economic area in 1992. agreements in seven sectors have been in force since mid - 2002 ; a further eight agreements were signed by the eu and switzerland just three weeks ago. these now need to be approved by parliament or, if necessary, by the people. opening up the swiss labour market vis - a - vis the eu is of particular importance. for our country, the enlargement of the workforce through the immigration of foreign nationals has long been crucial, given its own limited labour potential. earlier arrangements were customised to suit the needs of certain sectors, notably the construction, tourism and agricultural industries. however, since the bilateral agreement on the free movement of persons entered into force two years ago, the swiss labour market has been open to eu citizens. and vice - versa - swiss nationals seeking employment are free to work anywhere in the european union. there are, however, still quotas in place. these will be removed in 2007. in june of this year, the preference clause favouring swiss employees was abolished. a company in switzerland may now employ eu nationals without first having to prove that an equally qualified person could not be found for the position in the country. thanks to the agreement on the free movement of persons between switzerland and the eu, switzerland now has access to an extensive highly - trained workforce. it has not yet been possible to estimate just how much of this potential

financial sector regulation and oversight is, without a doubt, a tough challenge. but the snb is also faced with equally tough challenges in the area of monetary policy. iii. review of monetary policy in 2009 in 2009, the snb ’ s monetary policy activities were focused entirely on combating the financial and economic crisis and the associated deflationary trends. price stability, which is not compatible with either deflation or inflation, remained the core objective. as early as autumn 2008, the snb had adopted an expansionary monetary policy stance as a result of the increasingly unfavourable economic outlook and the prospect that inflation would be low for the foreseeable future. between october and december 2008, the snb lowered the target range for the three - month libor by a total of 225 basis points, to only 0. 0 – 1. 0 %. the snb also ensured a generous supply of liquidity to the money market. the economic situation continued to worsen into the spring of 2009. in addition, the uncertainty engendered by the financial crisis had led to a strong appreciation of the swiss franc against the euro. in view of the economic situation prevailing in switzerland at that time, there was the risk of a pronounced deflationary trend, in particular if the swiss franc were to appreciate further. this risk necessitated a further easing of our monetary policy. the substantial monetary policy easing therefore continued, with a further 25 basis point reduction in the libor target range in march 2009. this left the new range at 0. 0 – 0. 75 %, where it has since remained. the snb aims to keep the libor in the lower end of the range, i. e. at around 0. 25 % ; the one - week repo rate has been at practically zero since the end of 2008. the room for manoeuvre using the traditional interest rate instrument was thus effectively exhausted in march 2009. to relax monetary conditions further, the snb significantly increased liquidity. it did so via a number of unconventional monetary policy instruments. it concluded longer - term repos and purchased bonds issued by private sector borrowers. it also bought foreign exchange on the foreign currency market and acted to prevent the swiss franc from appreciating further against the euro up to the end of the year. against the background of the economic recovery, following its monetary policy assessment in december the snb is acting only to decisively counter an excessive appreciation of the swiss fran