strong credit growth • remarkably high foreign capital inflows and • widening current account deficits. whereas global imbalances have been one of the focal points of policymakers over the last years, imbalances have widened also within the euro area. since the launch of the euro in 1999, the euro area has experienced significant divergence in the external economic positions of its member states. two groups of economies emerged : surplus countries and deficit countries, with the two cesee countries that have already introduced the euro falling by large into the second category. the determinants of the trend of divergence in competitiveness and current accounts are manifold. changes in price competitiveness can reflect • convergence in the price level of tradable goods, • the balassa - samuelson effects and • the response to cyclical differences between euro area countries. 8 it is possible that the euro has amplified the divergence trend in current accounts since it grants better access to international capital markets for catching - up member states and hence allows running larger trade deficits. the imbalances might be attributed to european commission ( 2009 ) : “ quarterly report on the euro area – march 2009 ”. • domestic demand pressures, • surging private and external debt and • the inefficient use of foreign capital ( e. g. housing booms ). adjusting imbalances remains a serious challenge particularly within economic and monetary union. 9 whereas the global crisis has dampened growth dynamics and lowered potential output of both advanced and catching - up economies, it has accelerated the adjustment of imbalances. to a large part, this adjustment is achieved through the trade channel, with demand for imported goods decreasing more strongly than demand for exports of the cesee region. that said, it remains key to understand the determinants of these imbalances, while close monitoring remains essential in the near future. it is one of the key objectives of this year ’ s conference to elaborate on the euro ’ s role as a shelter, a term which has become en vogue during late 2008 and mid - 2009. the last two years provide ample evidence that the euro has been an anchor of stability throughout the cesee region. this is closely linked to the highly effective measures the ecb has taken to support the functioning of financial markets. the launch of international financing packages for some countries of the region ( among them hungary and romania ), increasing confidence and an improvement in the global risk appetite have contributed to a recent easing in financial market strains

bank. 3 this framework can be regarded as an institutional solution to the problem of avoiding major mistakes. an independent central bank is better able to give priority to long - term interests over short - term gains. the lecture “ on keeping promises ”, commentaries by endre stavang and henrik syse and francis sejersted ’ s summary of the debate are published in norges bank occasional paper no. 39 ( 2009 ). kim gunnar helsvig ( 2007 ) : elitisme pa norsk. det norske videnskaps - akademi 1945 – 2007 [ elitism in norway. the norwegian academy of science and letters 1945 – 2007 ], novus forlag, oslo, pp. 18 – 19. see inter alia report no. 29 ( 2000 – 2001 ) to the storting, guidelines for economic policy, ministry of finance, and the regulation on monetary policy of 29 march 2001. that it is tempting, but dangerous, for a government to focus on short - term gains was a lesson greek politicians learned this spring. government spending exceeded revenues over a long period. accounts and official statistics were fudged. politicians may have hoped to secure a quick admission for greece into the euro area, with the advantages this would bring. they may have also believed that high government spending and low taxes might help their re - election prospects. instead, they now have to steer the country through harsh reforms and substantial cuts. 4 the norwegian economist finn kydland received the nobel prize for economics in 2004 for having shown that on the whole, monetary policy decisions are better if policymakers delegate interest rate setting to an independent central bank under a clear mandate. 5 as a central bank we must adhere to the mandate we have been given and be able to set the key rate based on a professional assessment. 6 this is a system that lays a solid foundation for making good decisions. 3. we make decisions under uncertainty independence alone does not guarantee good decisions. even if an independent central bank is better positioned to avoid having short - term expediency and changing preferences dictate interest rate policy, its decisions must be made under considerable uncertainty. we have imperfect knowledge about the state of the economy, nor are we absolutely certain of how economic relationships function. alan greenspan, the former chairman of the us federal reserve, described this in the following words : “ uncertainty is not just an important feature of the monetary policy landscape ; it is the defining characteristic of that landscape ” 7