per cent. at the most recent monetary policy meeting on 3 may we decided to keep the repo rate unchanged. at the same time, our assessment was that the repo rate will need to be raised gradually, which we had also assumed earlier. now we believe that it will need to be raised more than was anticipated in february. this is necessary so that inflation will develop in line with the target. the main reason why we need to revise our forecast upwards is the outcome of this year ’ s wage bargaining rounds. the central wage agreements have been slightly higher than we had earlier had reason to believe, given that unemployment is still quite high in sweden. some forecasters have believed in a higher interest rate path than we have predicted. however, this does not appear to be because their forecasts for wages or fiscal policy have differed substantially from those made by the riksbank. i would also like to point out that so far there are no dramatic differences in our picture of current economic developments today compared with february. we will return to this in the monetary policy report to be presented in june with a more detailed account of how we view the situation. own interest rate forecasts when we expressed our views in february regarding the future development of the interest rate, it was the first time we presented our own assessment of the future repo rate path. by this we mean that we try to calculate what we believe will be a well balanced monetary policy over the coming years. previously we presented forecasts for the economy on the basis of what the financial market participants believed about the repo rate. now that we are presenting our own interest rate path it will be clearer both what we believe about the interest rate and what we believe about the economy in general. we consider this to be a major step forward in the riksbank ’ s way of explaining how monetary policy functions. for most people i believe it is more important to have an idea of the development of the interest rate over time, rather than to know what an individual interest rate decision will entail. in this context i always try to be as clear as possible. the interest rate path is merely a forecast, not a promise. the economic conditions on which we base our forecasts are constantly changing. changes are constantly taking place in the economy, which means that we have to reconsider our opinions of future developments. the interest rate path represents nothing more nor less than the best assessment we were able to make at the time it was published.

vocational training must be developed to cover working careers characterized by mobility and change, with workers safeguarded by reinforced safety nets and insurance systems, both public and private, during periods of inactivity. schools and universities must support this process by ensuring education of adequate quality and quantity, acting with determination to raise levels of academic achievement and develop new skills. italy needs conditions that are conducive to enterprise and to the reallocation of productive factors. the lag we have accumulated is accentuated by a redundant regulatory framework, by complex and costly administrative obligations that must be drastically reduced, law that must be rendered more certain, widespread corruption that must be stamped out, and insufficient protection from crime. immediate, visible progress in removing these serious obstacles can stimulate productive investment, including from abroad, in all the country ’ s regions, especially in the south, where what is most critical is the environment for business activity, on which the balanced development of our economy ultimately depends. the programme of reforms launched in the last two years stems from these considerations. but in many instances, after the enactment of reform laws, the implementing measures have been slow to follow ; in some cases they are still lacking and administrative practices remain unchanged. this is a recurrent feature of our country ’ s history : the chief difficulties reside not so much in the substance of the laws as in their effective application. the pace of reform has slackened in the past year, owing in part to the progressive deterioration of the political climate. in resuming the path of reform with determination – as the european commission too urges in the recommendations accompanying the closure of the excessive deficit procedure – it is vital to adopt a comprehensive approach that fixes medium - term objectives from the outset. structural reforms take time ; they can be implemented in succession, provided that they are designed as part of a bigger picture that immediately clarifies their goals, implications and benefits. a credible programme can have an impact on expectations at once, dispelling uncertainties, fostering investor confidence and favouring the prospects of employment and income, above all for the young, who today find it difficult to imagine any future in our country. the consolidation of the public finances was also postponed for too long ; in the face of demographic pressure on important expenditure items, the priorities for the allocation of resources were not clearly set. in 2007 public expenditure excluding interest payments was 43 per cent of gdp, two percentage points more than in 1997 ; the primary surplus had contracted by more than three points.