. international coordination is also important in efforts to establish a framework to allow financial markets to function efficiently. in recent years, this has been reflected in the drive towards greater transparency. unless countries develop and implement a clear and coherent way of disseminating relevant information, global financial markets will be unable to function at peak efficiency. this applies to both the public and the private sectors. following the asian and russian crises of 1997 - 98, the imf and the world bank launched the financial sector assessment program to identify strengths and weaknesses in national financial systems. this effort is backed by reports on observance of standards and codes, which are conducted by the imf. these reports can bolster confidence by demonstrating to markets the level of commitment that countries have to boosting their transparency. other efforts to improve transparency in the wake of enron and similar scandals include initiatives to improve corporate reporting, accounting, and dissemination of financial market information. these efforts to further domestic transparency will certainly be helpful on their own. but if we coordinate our efforts, we can spread the benefits of transparency and help global financial markets to operate more efficiently. this applies to the development of market codes of conduct, as well as to compliance and enforcement efforts. and it also applies to the development of accounting standards that are universally applicable. it is only through coordination that we will all get the full benefit of improved standards and codes. unlike macroeconomic policy, where the best collective outcome depends on each country following appropriate domestic policies, when it comes to international trade and global financial markets, the best collective outcome will require strong, coordinated efforts. conclusion let me sum up. as globalization continues, it may appear that there is a need for national authorities to coordinate their macroeconomic policies through formal agreements and arrangements. i have argued that this is not the case. i hope that i have convinced you that such coordination is unlikely to be helpful. but i hope that i have also convinced you that information sharing among countries remains extremely important. what is crucial is that national authorities pursue sound domestic policies, while being fully cognizant of what is happening elsewhere in the world. these policies include a well - anchored monetary policy focused on inflation control and a prudent fiscal policy conducted within an appropriate medium - term plan. such policies should be supplemented by a set of structural policies that foster economic flexibility, as well as by policies that encourage openness to international trade. by strengthening their domestic economies while taking global developments into account, policy - makers will be helping to

##em ’ s limited scope for remedying an escalating situation when a member state is struggling to get through. most eu member states now have budget deficits exceeding the limit of 3 per cent of gdp under the stability and growth pact. as a result, the commission has ordered or will order these member states to reduce their deficits to below 3 per cent of gdp within a short span of years. the stability and growth pact is at the heart of the eu ’ s fiscal surveillance. it is no exaggeration to say that this surveillance has not been satisfactory when it comes to greece. the outcome remains to be seen. * * * it is encouraging to see that the normalisation of the international financial markets has made great headway. since the autumn, the spread between collateralised and uncollateralised yields, reflecting uncertainty in the money markets, has been back at pre - crisis levels. us long - term yields have risen since the beginning of 2009 in the light of improved growth prospects – and so have leading international stock indices. the euro has weakened against the dollar due to the widening yield spread in favour of the usa, exacerbated from january this year by uncertainty about the greek economy and concerns about a possible ripple effect in other euro area member states. but these fluctuations are still within normal range. the current euro / dollar rate is close to the level before the onset of the financial crisis in the summer of 2007. * * * in denmark, the crisis caused output to drop by more than 7 per cent. since last summer, growth has been back in positive territory, albeit moderate. it will remain so in the coming years. we will probably have to wait until 2013 to see danish output return to the level observed immediately before the crisis. private consumption in denmark is recovering slowly. disposable incomes are showing good growth this year, reflecting income - tax cuts and other factors. at the same time, household wealth is beginning to pick up again. the prospects for the housing market are also brightening, at least at the current level of interest rates. moreover, consumer confidence has seen a marked increase over the past year. nevertheless, the purse strings are still relatively tight, probably due to higher unemployment. but the overall finances of the household sector are quite robust. it is understandable that households are consolidating their finances. at the same time, there is scope for private consumption to contribute to the expected rebound in growth in the near term. denmark