powers to fight against tax evasion and smuggling. despite the increase in public debt in recent years, total debt to gdp ratio is still below critical values. we expect that the actions that are being taken to strengthen fiscal revenues on a sustainable way will contribute to stabilize this ratio at sustainable levels. given the uncertainty that remains about the global economic prospects i would say that there are three main policy challenges we are currently facing as policy makers : the first one is to anchor inflation expectations to the midterm target. this means that the central bank has to stand ready to take any necessary measures to address inflationary pressures, even in a context of potential deterioration of economic growth at the national level. this is important because if the downside risks to growth materialize and inflation expectations are still above the midterm target, the central bank has no room to ease monetary policy and support economic growth. the second main policy challenge is to secure fiscal sustainability in the medium term through the strengthening of tax revenues and the implementation of prudent fiscal policies reflected in the stabilization of the rising debt - to - gdp ratio and the reduction of the fiscal deficit to levels below 2 percent of gdp. this is particularly crucial as we need to restore fiscal maneuver in the short term in order to be able to address a more severe global economic downturn or the impact of a natural disaster which in fact is very likely to happen as guatemala is among the world ’ s most vulnerable countries to experience natural disasters. securing fiscal sustainability is not just an issue of reducing public expenditure as besides high fiscal rigidities ; guatemala has important infrastructure and social needs that need to be addressed in order to foster sustainable economic growth. this drives me to the third main policy challenge which is to foster sustainable economic growth in an uncertain international environment. to address this challenge commitment is needed not just from the government but mainly from the private sector as well as civil society. as i already mentioned, some work has been done to build these strategic alliances through the competitiveness agenda and the integrated policy agenda for foreign trade, competitiveness and investments as both have been endorsed by the private sector. in addition, efforts initiated by the previous government regarding specific programs to address poverty and creation of opportunities for the most vulnerable groups are being taken by the new administration as well as specific actions to address the high levels of crime and violence that also affect sustainable economic growth. some of these actions will render benefits in the medium term, so in the mean time the main contribution of monetary and fiscal policies would

frank elderson : 2014 pin agreement – incentive for socially efficient and innovative payments speech by mr frank elderson, executive director of the netherlands bank, on the occasion of the signing of further agreement ii ( “ the pin agreement 2014 ” ), the hague, ministry of finance, 3 september 2014. * * * your excellency, ladies and gentlemen, pin agreement 2014 crowning glory of cooperation of market parties as chairman of the national forum on the payment system, i am very pleased about the further agreement ii that was signed just now. this agreement, also known as the pin agreement, is an up - to - date adaptation of the objectives stated in the original covenant dating back to 2005. that meaningful covenant at the time paved the way for banks and joint retailers to encourage consumers to use their debit cards in order to reduce the social costs of the payment system. because, as we all know, cash is expensive. that said, i would like to stress here that banknotes and coins will continue to play an essential role in payment transfers, and will therefore continue to be at everyone ’ s disposal. the 2005 covenant cleared the air between the market participants. this was urgently required following the heated debate about the social costs and revenues of payments, and the question where these end up. the mutual understanding that cooperation and trust pays off was at the root of a series of measures to promote debit card use. and not without results. the sectors not keeping pace with the introduction of payment terminals have since also started using them, and smaller amounts can now be paid by debit card virtually everywhere. yet more debit card payments and today the era of the 2014 pin agreement has started. one billion extra debit card payments should definitely be feasible by 2018. this would bring the total to 3. 7 billion, and would surpass the number of cash payments at the till. the foundation for the promotion of efficient payments has proved that it is very capable of producing tangible plans to achieve this. progress in minimising disturbances in payments systems but users of course think that electronic payment systems should always work. that is a bit much to ask as it is simply inherently unachievable. for that matter, the market participants represented in the national forum on the payment system have made great efforts to further increase the robustness and safety of payments transfers, partly in response to last year ’ s repeated disturbances of payment systems. for instance, almost the entire pin chain has a fall - back facility. bis