approximately 80 % – very rapid increase in welfare. some countries did even better : in poland and estonia corresponding increase in economic welfare 1 / 2 bis central bankers'speeches was approximately 170 %. research from the ebrd shows that the countries that joined the eu have also been better in ensuring that growth is inclusive. rapid economic growth in the region, integration with the older eu countries and convergence towards them has been an economic success story for the whole continent, showcase example of economic reforms yielding benefits that can be and are shared widely. many eu member countries that joined in 2004 are now integral parts of eu - wide production networks. i was happy to witness the arrival of the new member states and also new members to the european commission 1. 5. 2004 before moved to the bank of finland and to the ecb governing council in july of the same year. as we celebrate these achievements, we need to remember their prerequisites. global economy is full of sad examples of countries failing to catch up, failing to improve welfare of their citizens. if institutions are not stable and credible, and if the rule of law is not respected, then it is not possible to attract investments and not possible to ensure sustainable economic convergence in the longer term. in this regard performance of the countries in the region was helped by the european union, which was the anchor. it offered both economic assistance and also a model of democracy, which respected rule of law and separation of powers. while this model of independent institutions and rule of law has been successful, many see it now challenged in various parts of the world, and the issue is not unknown here, either. every country and every nation has her right to choose their political leaders and political tendencies. but membership in the european union, which is based on common values and respect of the rule of law, brings also its obligations. the question is : how to preserve the rule of law, how to preserve independence of public institutions, including central banks and financial supervisors, from undue political influence? economic literature and history tell how important the role of institutions is for sustainable economic growth. countries that are able to share increasing prosperity and, for example, ensure education opportunities are better placed to uphold functioning institutions in the long - run. however, countries with good economic performance are not immune to temptations of various degrees of populism. one type of populism is that establishment and the forces in power is challenged. this is a challenge everyone in power must accept and can be

stated, i would like to clarify that the exploration of the potentials that the different regions have to offer and the identification of their level of use is also essential in terms of the banking system ’ s activity, in particular of the geographic expansion and financial intermediation. another major reason motivating the bank of albania to organize these meetings relates with the establishment of a more effective communication channel between the bank of albania and the public. we believe that the direct contact with various social groups in different geographic regions ( that is to each and every family ), in addition to the traditional means of communication, press conferences, monetary policy or financial stability reports, is a very efficient tool and frequently determinant. i would like to dwell today on some matters of interest to the entire audience. first i would like to make a brief outline of the bank of albania ’ s latest analysis of the economic and financial situation in albania : in brief, three are the main developments of greatest interest to the audience : with regard to the international developments, the economic and financial situation has been very complex in the last months. inflation has turned into a point of concern in most foreign economies, mainly driven by the high prices of raw materials, oil and food. in addition, economic activity in developed economies has experienced sharp turns. euro area economy is at present in front of many questions, while the us and some asian economies have shown slow rates of economic growth. credit crisis has caused many reputable international institutions to experience large financial losses and its contamination process is still present. recently, the two us mortgage giants, freddie mac and fannie mae, which were on the verge of collapse, were subject to an unprecedented and costly rescue plan designed by the us treasury department. all these issues have triggered uncertainties in the markets, causing the future forecasts to be more challenging and the participants ’ exasperation to peak. i would consider the immunity shown by our economy in terms of price stability as the most outstanding development. albania ’ s economic activity is progressing in line with our previous expectations. a few days ago, instat published the inflation figure for august 2008, according to which annual inflation marked 2. 5 %. following a 12 - month period of inflation rates standing at around 4 - 4. 5 %, in line with our forecasts, it is assessed that inflation will fluctuate in the next few months at around 3 %, which is our quantitative objective. worth to note, however, is that the risk for