mine, greece, faces one of the largest primary adjustments ever undertaken. moreover, as with other european countries, greece cannot expect to benefit from lower interest rates, depreciation, or export growth to facilitate adjustment. it will require significant wage reductions and productivity enhancements to restore competitiveness and growth. the possible responses of other countries to the situation are denial or conviction. in the former case, growing public debt will push up global interest rates, crowding out private investment and lowering potential growth. 2 given the scale of the fiscal challenge, it is perhaps not surprising that some eminent economists are looking for an “ easier ” way out. this form of denial is to allow temporarily higher inflation in order to inflate away public debt. to the bank, this is a siren call. those most in need of fiscal consolidation are often those with debt portfolios of the shortest duration. the “ surprise ” would have to be very sudden and very large to have a material impact. of course, if temporary inflation becomes built into expectations, real rates may well increase, rather than fall, thereby exacerbating debt dynamics. moreover, in the past, it has proven devilishly hard to keep inflation high temporarily. would it be credible to have a oneoff increase in the inflation target? central banks have worked for decades to get inflation down to levels consistent with price stability. we should not risk these hard - won gains. the second, more positive, and more likely, response to the fiscal challenge is conviction. we have seen that conviction in recent weeks. the european financial stabilization plan, announced in may, is a bold step towards accelerated fiscal consolidation. the plan has been followed by a series of concrete actions. spain announced measures totalling 1. 5 per cent of gdp in additional fiscal consolidation, while portugal introduced consolidation measures amounting to 1 per cent of gdp for 2010. greece has passed the key elements of in a simulation that assumes that advanced countries do not make any fiscal adjustments to stabilize their debt dynamics, the bank found an increase of 175 to 300 basis points in advanced - economy yields, given the scale of the debt burden. see k. beaton, c. de resende, r. lalonde, and s. snudden, “ prospects for global current account rebalancing, ” bank of canada discussion paper no. 2010 - 4. april 2010, available at : < http : / / www. bankofcanada. ca / en / res /

as the surge in crude oil prices. the three - month rate of change in the domestic corporate goods price index has been positive, mainly due to the rise in international commodity prices. the year - on - year rate of change in the consumer price index ( excluding fresh food ) became positive in october 2007, registering 0. 1 percent in that month and 0. 4 percent in november. as for the outlook, it is projected to follow a positive trend due to the rise in prices of petroleum products and food products in the short run and the positive output gap in the longer run. as for financial conditions, the environment for corporate finance has been accommodative. in the cp and corporate bond markets, the issuing environment has been favorable as a whole, although issuance spreads on those issued by firms with low credit ratings have expanded slightly. the lending attitudes of private banks have continued to be accommodative. under these circumstances, the amount outstanding of lending by private banks has been increasing moderately, and the amount outstanding of cp and corporate bonds issued has been above the previous year's level. ii. conduct of monetary policy regarding the conduct of monetary policy, the bank's basic thinking has been that ( 1 ) given the extremely accommodative financial conditions, the level of interest rates is to be raised if japan's economy is to follow a path of sustainable growth under price stability, and ( 2 ) the pace of increase in interest rates should be determined in accordance with improvements in the economic and price situation without any predetermined view. the bank will continue to conduct appropriate monetary policy while confirming that japan's economy remains likely to follow a path of sustainable growth under price stability by monitoring economic activity and prices as well as the situation of financial markets at home and abroad and thoroughly assessing relevant upside and downside risk factors. iii. disposal of stocks purchased from financial institutions although it was not a monetary policy measure, the bank implemented a stock purchasing program between november 2002 and september 2004. through this program, the bank purchased stocks held by financial institutions in order to encourage them to reduce their market risks associated with stockholdings. the bank has started to dispose of these stocks in the market from october 2007, and the book value of the remaining stocks held by the bank was approximately 1. 5 trillion yen as of the end of december 2007. in disposing of them, the bank has been extremely careful to avoid any financial losses and also to minimize the impact