zealand sweden peru chile south africa hong kong norway uk uk israel india eurozone brazil peru sweden czech rep. mexico norway australia south korea israel malaysia iceland new zealand south korea australia eurozone poland hong kong colombia indonesia philippines canada mexico poland india switzerland china czech rep. indonesia china turkey philippines south africa usa hungary hungary brazil malaysia argentina russia russia japan iceland argentina - 1, 000 ( percentage ) - 800 - 600 - 400 - 200 at 19 oct. 2009 between 4 sep. 2008 and 19 oct. 2009 source : bloomberg. figure 6 interest rates in pesos and dollars in the local market ( percentage ) jan. 08 apr. 08 jul. 08 oct. 08 stock exchange - 90 days jan. 09 apr. 09 jul. 09 oct. 09 libor + 90 - day on - shore spread sources : bloomberg and central bank of chile. table 1 monetary policy rate and expectations according to ees ( percentage ) actual level expected for expected 2 same month months ahead expected for dec. 09 oct. 2008 8. 25 8. 50 8. 50 7. 00 dec. 2008 8. 25 8. 25 7. 75 6. 25 feb. 2009 4. 75 6. 25 5. 00 4. 00 nov. 2008 8. 25 jan. 2009 8. 25 7. 25 mar. 2009 8. 25 7. 50 2. 25 6. 75 3. 13 2. 50 6. 63 5. 50 2. 00 source : economic expectations survey ( ees ), central bank of chile. figure 7 foreign credit flows to residents ( billions of dollars ) 3. 0 3. 0 2. 5 2. 5 2. 0 2. 0 1. 5 1. 5 1. 0 1. 0 0. 5 0. 5 0. 0 0. 0 - 0. 5 - 0. 5 - 1. 0 - 1. 0 - 1. 5 - 1. 5 - 2. 0 jan. 07 jul. 07 jan. 08 new credits to banks jul. 08 jan. 09 - 2. 0 jul. 09 new credits to non - banks net flow ( * ) ( * ) discounting bank and non - bank amortizations from total new credits. source : central bank of chile. figure 8 world growth ( annual change, percentage ) - 3 - 6 - 9 - 12 world at market exchange rate - 3 - 6 - 9 - 12 chile ( 1 ) gray area shows projections as from 2009. ( 2 ) figures for growth in 2009 and 2010 stand for

birgir isleifur gunnarsson : monetary issues in the european union and iceland speech by mr birgir isleifur gunnarsson, chairman of the board of governors of the central bank of iceland, at a seminar organised by the iceland trade council, euro info office in iceland and the eu commission on the theme : does the euro affect iceland?, reykjavik, 31 october 2001. * * * ladies and gentlemen : the evolution of european integration during the second half of the last century is remarkable in many ways. this process began soon after the end of world war ii and represented an effort to forge stronger bonds between european nations and thereby, among other things, reduce the likelihood of further conflict on the continent. although i shall not go into its history here, many notable milestones can be cited along the course that has been taken. one of the most notable was the formal establishment of the economic and monetary union in the beginning of 1999. now the abolition of the individual member nations ’ separate currencies is in sight. as of next year they will be replaced by euro notes and coin. not only will prices of goods and services be calculated and stated in a single currency in the twelve emu countries, but the same notes and coin will be used for business in them all. one consequence of pricing in a single currency in all member countries will be to facilitate buyers of goods and services greatly in making price comparisons, and competition within the eu will certainly become more active than it has been until now. economic and monetary union the emu has a population of more than 300 million and accounts for 16 % of global gdp. by way of comparison, the usa has a population of 280 million and accounts for 22 % of global gdp. exports of goods and services are equivalent to 19 % of emu gdp, while the corresponding figure for the usa is under 11 %. some 19 % of total world merchandise exports come from the emu, and 15 % from the usa. twelve of the fifteen eu nations belong to the emu. the uk, denmark and sweden remain outside it, but their positions differ somewhat. denmark and the uk have stated reservations about membership, on which they have reached agreement with other eu states. sweden, on the other hand, has opted to remain outside the emu, although no special reservations have been agreed upon for them. denmark is involved in currency cooperation with the emu, one aspect of which is that the exchange rate of the danish krone may not devi