– it did have an exchange rate adjustment. if you take that as an example, remember there was no imf around, there was no efsf and gross [ government bond ] issuance in 1992 was a multiple of the figures that we see today. it ’ s true that italy moved the exchange rate, but this cuts both ways. it brought a temporary respite to the economy, so that exports could grow, but it also widened sovereign bond spreads because exchange rate risk came on top of sovereign risk. three or four years down the road italy still had something like 600 basis point spread with respect to the german bund. furthermore, the effect of the devaluation would have been only temporary without the structural reforms ( abolition of indexation among others ) that followed. bis central bankers ’ speeches but these austerity programmes are very harsh. don ’ t think that some countries are really in effect in a debtor ’ s prison? do you see any alternative? they could leave the eurozone? but as i said before, this wouldn ’ t help. leaving the euro area, devaluing your currency, you create a big inflation, and at the end of that road, the country would have to undertake the same reforms that were due to begin with, but in a much weaker position. but maybe it would be the best thing for the rest of the eurozone? well, then you would have a substantial breach of the existing treaty. and when one starts with this you never know how it ends really. you said earlier that it would have been far better if the efsf had have been in place. so where are we on creating this firewall – what size of bazooka are we talking about? one first observation is that the delay in making the efsf operational has increased the resources necessary to stabilising markets. why? because anything that affects credibility has an immediate effect on the markets. a process that is fast, credible and robust needs less resources. it sounds like you ’ re a bit disappointed then with the outcome of last week ’ s summit then? actually no, because there was confirmation of previous figures on the efsf ’ s resources – and of an additional €200bn that could be provided by the international monetary fund. what was also overlooked by many is that the date for a first assessment of the adequacy of resources has been brought forward to march 2012 – in just three months ’ time, when the leaders

and development ( r & d ) investments but excluding land purchasing expenses - - in all industries and enterprises including financial institutions. the year - on - year rate of change in the consumer price index ( cpi ) for all items less fresh food, or the core cpi, has been at around 0 percent ( chart 6 ). that said, recent price developments are largely attributable to temporary factors both in terms of positive and negative changes. specifically, mobile phone charges - - for which low - cost plans have been launched since spring 2021 - - have pushed down the overall rate of change in the cpi by more than 1 percentage point. on the other hand, the cpi has been pushed up by ( 1 ) a rise in energy prices - - which were subdued in 2020 - - reflecting developments in crude oil prices affected by a recovery in the global economy and ( 2 ) the base effects of a discount on hotel charges through the " go to travel " campaign in 2020, the government's program to promote domestic tourism. when excluding these temporary factors, the year - on - year rate of change in the cpi has been steady at around 0. 5 percent. meanwhile, medium - to long - term inflation expectations, which represent the perception of firms and households regarding future prices, have picked up ( chart 7 ). c. outlook for and risks to economic activity and prices the outlook for japan's economy is that, for the time being, there will likely remain downward pressure stemming from vigilance against covid - 19 on services consumption and ( 2 ) the effects of supply - side constraints on exports and production. thereafter, however, with the impact of covid - 19 waning gradually, mainly due to the widespread vaccinations, the economy is likely to recover, supported by an increase in external demand, accommodative financial conditions, and the government's economic measures. from the middle of the projection period that covers through fiscal 2023, japan's economy is projected to continue growing, albeit slower, at a pace above its potential growth rate, as a virtuous cycle from income to spending intensifies in the overall economy, including the household sector. given these factors, in the bank's october 2021 outlook for economic activity and prices ( outlook report ), the medians of the policy board members'forecasts for the yearon - year growth rate of real gdp are 3. 4 percent, 2. 9 percent, and 1. 3 percent