for example – analysis of the baltic states was discontinued after they joined the eu. on the other hand, bofit already recruited its first china economist in the late 1990s. it was clear then that china was becoming a very important player in the global economy, and so also for finland. analysis and research on the russian economy has continued uninterruptedly for more than 25 years at the bank of finland. bofit has always been ready to publish its reports and analyses, and this has helped build its 1 / 3 bis central bankers'speeches reputation both within finland and abroad. at the same time, analysis of these emerging market economies is also one of the areas of specialization that the bank of finland offers other members of the european system of central banks. i am happy to see representatives from many other members of the escb here today. at to the russian economy today, it has gone through a period of major difficulties. last year, gdp declined by almost four per cent, and this year it continues to decline, by almost one per cent. forecasts for recovery are relatively subdued. russian gdp is not expected to reach the level of 2014 until 2019. while the macroeconomic situation has been difficult, russia has been able to push through reforms. the decision to float the rouble and to move towards fully fledged inflation targeting has been instrumental in helping the russian economy adjust to the period of lower oil prices. in addition, the bank of russia is tackling consolidation of the russian banking sector with renewed vigour. the number of banks has been reduced by more than one third during the last two years. this consolidation will make the banking sector more stable. despite these policy reforms, the russian economy still faces significant challenges. structural reforms are needed in many areas to raise economic potential. to enhance productivity, greater competition is needed, both at home and from abroad. productivity improvements are vital, as the working - age population is declining. in china, gdp growth has been very rapid for the past three decades. it is now decelerating towards six per cent. this was to be expected after such vigorous growth. in china, too, the working - age population is declining. despite this deceleration in growth, the chinese experience shows that it is possible to lift literally hundreds of millions of people from poverty through market - oriented reforms. but, in china, too, a lot can still be done to further raise productivity. for example, further reform of many large state -

erkki liikanen : finland, the emu and the introduction of the euro speech by mr erkki liikanen, governor of the bank of finland, at the economic forum of hospodarske noviny club, bratislava, 20 october 2006. * * * introduction finland joined the euro area among the first eleven countries on 1 january 1999. the emu and the introduction of the euro marked a major step towards deeper integration within the eu, and viewed from the finnish perspective, have affected our economy and economic policies in many respects. in the debate before the introduction of the euro, it was recognised that while the emu and the euro would bring with them many benefits in terms of economic efficiency, their impact on economic stability was open to dispute. finland was different from other potential emu countries and the question was : could the single monetary policy be suitable for the finnish economy? firstly, i will walk you through this " asymmetry discussion ", which at the time received a great deal of attention, both among economists and a broader audience. secondly, i will tell you about the changeover process, including the information campaigns organised by the bank of finland and others, as well as about the lessons we learnt from the changeover. special focus is placed on attitudes and expectations, as measured by various opinion polls. and finally, i shall conclude by discussing the performance of the finnish economy during the eight years we have now been in the emu. doubts before the start of the monetary union : macroeconomic stability asymmetric shocks before we joined the emu, there was a lively and intensive debate about its pros and cons. it was recognised that the monetary union would bring about many benefits in terms of economic efficiency, such as less uncertainty over exchange rates, lower costs of currency exchange, more price comparability and greater competition, as well as more efficient money and other financial markets. but opinions were sharply divided as to the impact of the monetary union on economic stability. much attention was devoted to the so - called asymmetry of the finnish economy. while macroeconomic trends in eu countries such as germany, france and the benelux countries usually were broadly similar, economic developments in finland diverged a lot. there were differences in the both the timing of the fluctuations and the amplitude of the fluctuations, which was much greater in finland than elsewhere. as the single monetary policy was to be tuned according to the economic situation of the whole euro area, it was feared