terms of macroeconomic policy, the tide has now turned. after a decade of low inflation, we moved last year very quickly to a period of high inflation. the inflation surge was driven by multiple factors : quicker than anticipated recovery from the covid19 pandemic, global supply chain bottlenecks exacerbated by renewed china lockdowns and, in the case of energy and food, russia's illegal war in ukraine. the ongoing monetary policy normalisation is a response to the dramatically changed inflation outlook. in the united states, the tightening of monetary policy began in march. so far, the fed has conducted two 75 basis - point hikes, placing the fed funds target range between 2. 25 % and 2. 5 %. it has also started to reduce its balance sheet. the ecb, in turn, announced in june its intention to raise interest rates in two instalments, first in july and again in september. in july, we raised the key ecb interest rates by 50 basis points. this was more than had previously been signalled, because the june inflation figures showed an even greater increase than we had anticipated, and so we determined that it 2 / 5 bis - central bankers'speeches was appropriate to take a bigger first step on the normalisation path. going forward, the ecb's interest rate decisions will be data driven, aiming for 2 % inflation in the medium term, in line with our strategy. let me next turn to central bank digital currencies. at the ecb, as in a number of other central banks across the world, we are looking into the possibility of introducing a cbdc, a digital euro. the investigation phase started in late 2021 and is expected to be concluded in october 2023. once the investigation phase is completed, we will decide whether to embark on actually building a digital euro. it is important to note that a digital euro would complement cash – not replace it – by allowing central bank money to be used in digital form also for retail purposes. we will continue to safeguard citizens'access to and the usability of cash across the euro area, even though its role as a medium of exchange has been diminishing rapidly, at least in some countries. a digital euro would give people an additional choice about how to pay and would make it easier to do so in an increasingly digital economy. it would expand the availability of digital central bank money beyond transactions between banks to include everyday peer - to - peer payments

been made to the united states and the question has been asked as to why europe us unable to effect as strong expansionary measures. many reasons exist that make comparisons with the united states infeasible. firstly, the expansion of the us public deficit is largely due to an increase in military expenses, which can hardly be regarded as counter - cyclical expansionary economic policy. furthermore, there was, and still is, substantially more genuine room for manoeuvre in the us economy in this respect. contrary to the euro area, us public finances were clearly in surplus when the country entered into recession. for demographic reasons alone the outlook for us public finances clearly outweighs that for the euro area. furthermore, the tax rate is markedly lower in the us in comparison to the euro area, which also gives the united states substantially latitude in taxation. finnish economy if the expected recovery of the world economy begins, the finnish economy will, without doubt, follow suit. however, forecasts suggest that the growth rate would only return to a 2 – 3 % level. one trend in which finland has taken the lead in international comparisons is population ageing. the problem of ageing is not exclusive to finland, but it has started to manifest itself here exceptionally early. in effect, the increase in labour growth in finland has virtually come to a halt and is expected to make a downwards turn in the near future. this will inevitably be reflected in all sectors of the finnish economic policy decision - making. in the next few decades, population ageing will pressure finland into increasing spending on its public sector, amounting altogether to some 6 % of the gdp. the funds accumulated in the pension scheme cover only one third of these upward pressures. can the remainder be met with increases in taxation? i doubt it. in fact, there is increased pressure to reduce taxes further in the future. another easily distinguishable future trend is tightening competition over the location of companies. finnish companies are increasingly a part of a global business world with operations in finland. in such a world the relocation of operations to places where costs can be kept to a minimum becomes the norm. a small, expensive, rapidly ageing and remote country is hardly in the best possible position when an international company is contemplating where to locate operations. labour mobility is gradually changing from a theoretical possibility into a reality that shapes economic policy. what kind of prospects does finland have for succeeding in international competition? political stability and security, a reliable legal system, a still solid infrastructure