to the port authority. the air space is now free and anybody planning to erect a high - rise building in the formerly restricted four degrees sight band should have no problem to obtain permit from the port authority. wind tunnel tests were carried out in france to test the building against wind forces with a speed of 275 km / hr. this required that the stone cladding and the curtain wall with glass, aluminium members and fixings thereto constructed in stainless brackets resist pressure and suction forces in the order of 2 / 3 of ton per square metre. this means moving weight of 8 average bodied persons standing on an area of 1m x 1m. total cost of the building, inclusive of fit outs and furniture, is expected to reach rs1, 890, 700, 000 of which rs234 million went to the exchequer in the form of vat. at constant 1980 prices, the year when one of the first high rise buildings appeared in the port louis skyline, the cost of this building excluding vat works out to rs395 million. at constant 1994 prices, the year when yet another high rise building appeared in the port louis skyline, the cost of this building excluding vat works out to just over rs1, 010 million. this building, taking into consideration that it is an intelligent building, is indeed the least expensive high rise building in port louis. before concluding, let me, on behalf of the board of directors of the bank of mauritius and on my own behalf, thank the mauritius commercial bank ltd. for having allowed us to use the mcb building for the installation of the sector navigational lights. thank you.

. but let me emphasise that the governing council takes note of the assessment of ministers that the preventive arm of the pact and the governance structure of the pact could be strengthened. the implementation of changes in the preventive arm, however, needs to remain clear and transparent so as to preserve fiscal discipline and equal treatment across countries. the governing council is concerned about the changes to the corrective arm. by allowing a more lenient implementation of the excessive deficit procedure, there is a risk that the 3 % nominal deficit limit will be diluted. this could undermine confidence in sound public finance in the euro area member states. the credibility of the excessive deficit procedure needs to be fully preserved. it is essential that member states pursue fiscal policies that ensure the sustainability of public finances. the fiscal framework enshrined in the treaty and the stability and growth pact is a cornerstone of economic and monetary union and thus key for anchoring expectations of fiscal discipline. it must be maintained. the public can be assured that the governing council remains staunchly committed to maintaining price stability. general challenges ahead i hope that the new member states will not be perturbed by this. they must not weaken in their convergence efforts. as positive as the impact of the “ convergence dividend ” is ( reinforced by the convergence expectations ), it should be absolutely clear to new member states that a divergence penalty reflecting divergence expectations and the fear of fiscal laxity would have an equally negative and devastating impact on economic performance. there are considerable challenges facing the new member states in the non - fiscal sector, too. inflation rates will probably be put under upward pressure by the balassa - samuelson effect owing to the process of catching - up with the other member states and by further convergence of administered prices to market levels. macroeconomic instabilities may also result from the high level of unemployment, which is largely structural, as well as high and rising unit labour costs. these factors deserve attention since the sustainability of the process of convergence hinges on a sound starting position and the policies pursued thereafter, which both influences the sustainability assessment of current policies. in this context, let me briefly mention exchange rate policies. erm ii lends credibility to new member countries owing to the implied protection of the eurosystem. however, vulnerabilities for the new member states remain. these stem mainly from rapid credit growth, the large debt denominated in foreign currencies, the current account deficits and the rapid worsening of their international