on structural fiscal adjustment, the new framework encourages the authorities to differentiate between temporary and permanent fiscal measures, thereby promoting more prudent long - term fiscal planning. the use of the expenditure rule as a single operational indicator used to monitor compliance with the new framework contributes to a more sustainable fiscal environment by encouraging disciplined budgeting and, thus, more effective expenditure - based fiscal consolidation plans. expenditure rules mitigate fiscal risks and create fiscal buffers, by curbing excessive spending during periods of economic boom. also, these rules allow flexibility for public investment and enhance predictability and market confidence in fiscal strategies. lesson 3 : national ownership of fiscal consolidation. the experience of the euro area debt crisis has clearly indicated that national ownership of fiscal adjustment efforts is critical for ensuring the success and sustainability of fiscal reforms. successful fiscal consolidations depend on political 2 / 8 bis - central bankers'speeches consensus and effective social dialogue. when countries take ownership of their fiscal policies, aligning them with domestic economic conditions and political realities, this strengthens their commitment to sound fiscal management. national ownership of fiscal consolidation plans allows governments to design tailored measures that reflect the specific needs of their individual economies, while fostering public support, because citizens are more likely to back homegrown reforms than those that are externally imposed. within the eu, where fiscal rules are in place, national ownership helps bridge the gap between eu - level requirements and domestic policy priorities. by embracing fiscal responsibility voluntarily, rather than merely complying with eu rules, member states can promote fiscal discipline, improve credibility with markets and enhance trust in european institutions. this approach supports long - term fiscal sustainability and economic stability, ensuring that fiscal consolidation efforts are both effective and politically feasible. but let me emphasise that trust, or credibility, is not something that can be obtained overnight. we will have to earn it. our new fiscal framework provides a necessary vehicle for doing so. the rest is up to us. as the old saying goes, " the proof of the pudding is in the eating. " 2. debt sustainability : a multifaceted discipline debt sustainability was perhaps the most immediate concern during the european debt crisis. the skyrocketing public debt levels in several member states led to a loss of market confidence, rising borrowing costs and fears of sovereign defaults. in this context, the european debt crisis offered key insights into managing sovereign debt effectively. lesson 4 : a holistic approach to debt sustainability. the crisis revealed that managing public debt is not simply about medium - term

speech governor signe krogstrup ’ s speech at danmarks nationalbank conference marking the 40th anniversary of the danish fixed exchange rate regime check against delivery introduction ladies and gentlemen, first and foremost, i want to thank all our participants today. those who have travelled far in order to be with us. those who spoke. those who asked questions. those who listened. our media representatives. i have enjoyed our lively and open exchange of views. i am grateful for your willingness to share experiences and for the insightful discussions. i will address some of my key takeaways from the conference, and comment on the current situation of high inflation and how we address inflation in a fixed exchange rate regime. i will finish with some considerations about future challenges and why i expect the peg to continue to be an important pillar in danish macroeconomic policy in the future. key takeaways from the conference let me first summarise my main takeaways from today ’ s programme : first, after widespread economic instability in the 1970s and early 80s, the introduction of the fixed exchange rate regime and a stabilityoriented focus for economic policy transformed the danish economy. the fixed exchange rate regime still remains in operation 40 years later. not by chance, but through effort and commitment. when put to the test through the years, we have reconfirmed the ability and the willingness to keep the krone stable against the euro. page 1 of 7 31 october 2022 and this brings me to a second takeaway, namely that the success of the fixed exchange rate regime is also rooted in the broad political support it has enjoyed since its inception. barry eichengreen pointed out how exchange rate pegs are often fragile ; that lasting exchange rate pegs are rare. he noted several reasons why it has worked for denmark. political support is one of them. i think in our case, it is key. any monetary policy regime is dependent on political support to remain credible. specifically, some form of political commitment to debt sustainability is needed to reduce pressures for monetary financing. but in the case of a peg, debt sustainability is a hard constraint. market participants will typically speculate against the peg if they perceive fiscal policy to be unsustainable. a successful fixed exchange rate regime also relies on fiscal policy taking an active role in stabilising the economy over the business cycle. when domestic economic developments deviate from those of the anchor currency economy – in our case, the eurozone – monetary policy of the anchor