conducted a very disciplined fiscal and wage policy. combined with erm ii membership, this has enabled denmark to maintain a credible and successful fixed exchange rate regime. pursuant to the regulation on monetary policy laid down by the government on 29 march 2001, the operational objective of monetary policy is low and stable inflation. norway ’ s mandate is as follows : “ monetary policy shall be aimed at stability in the norwegian krone ’ s national and international value, contributing to stable expectations concerning exchange rate developments. at the same time, monetary policy shall underpin fiscal policy by contributing to stable developments in output and employment. norges bank is responsible for the implementation of monetary policy. norges bank ’ s implementation of monetary policy shall, in accordance with the first paragraph, be oriented towards low and stable inflation. the operational target of monetary policy shall be annual consumer price inflation of approximately 2. 5 per cent over time. [... ] ” the first paragraph of the mandate sets forth its intentions. the last paragraph specifies what norges bank is required to do. the first sentence in the mandate refers to the value of the krone. stability in the internal value of the krone implies that inflation must be low and stable. low and stable inflation fosters economic growth and stability in financial and property markets. the regulation also states that monetary policy shall be aimed at stability in the norwegian krone ’ s external value, contributing to stable expectations concerning exchange rate developments. with open trade with other countries and free capital movements, we do not have the instruments to fine - tune the krone exchange rate. the krone has appreciated when economic activity has been high and there have been expectations of a wide interest rate differential between norway and other countries. the krone has depreciated when activity has declined and the interest rate differential has narrowed. there is also a strong tendency for the krone to revert to a level that stabilises the price level in norway relative to our trading partners, measured in a common currency. 1 the task of monetary policy is to provide a nominal anchor. the inflation target is such an anchor. the conduct of monetary policy norges bank ’ s operational conduct of monetary policy shall be oriented towards low and stable inflation. norges bank operates a flexible inflation targeting regime, so that weight is given to variability in inflation as well as variability in output and employment. inflation shall be 2½ per cent over time. monetary policy affects the economy with long and variable lags, and the bank must

bank of france reports industrial output continued to grow in most sectors in france in january 1997 bank of france, monthly business survey, 17 / 2 / 97. in january, according to the business leaders surveyed by the banque de france, industrial output continued to grow in most sectors. activity was especially buoyant in the intermediate goods and consumer goods sectors. the food processing sector was alone in recording a contraction in activity. the capacity utilization rate improved. overall demand strengthened further. french products were very competitive on foreign markets and this led to an increase in export orders. export sales increased in the united kingdom, italy and germany, while demand remained firm in the united states and asia. on the domestic market, inter - industry demand was strong, even though the orders received came with very short delivery times in most cases. order books are now near to normal levels. they are still considered to be low in the food - processing and automobile industries, but are deemed to be satisfactory in the capital goods and consumer goods sectors. inventories of finished products are gradually returning to normal overall, but they still exceed the desired levels in the consumer goods, food - processing and intermediate goods sectors. the outlook for the coming months is distinctly brighter. activity should increase in all sectors, with marked improvements in the intermediate goods and food - processing sectors. commodity prices were stable overall, while finished product prices declined slightly. this fall stemmed mainly from substantial price cuts in the automobile industry, while prices generally held up in the other sectors. investment plans for 1997 appear to be less ambitious on the whole compared with capital spending plans at the same period in 1996. nevertheless, the business leaders polled in january were more confident about future activity than they were a few months earlier. this could mean that previously postponed investment plans may be implemented in the coming months. however, plans for increasing output capacity remained few and far between, owing to the spare capacity currently available, and depend on stronger growth in demand. retail sales in january were up markedly over december 1996, and only slightly down on the exceptionally high level recorded a year earlier. employment levels remained stable in nearly all industrial sectors. they showed only a slight change in the services and retail sectors, but there were further falls in the building industry.