opportunities for real structural changes. this has been recognized by the international raters and is also reflected in growing investor confidence as evident from the growing remittances, foreign investment and in the pricing of international sovereign bond issues. these issues were oversubscribed in the us, europe and far east financial markets that now have an appetite to take long term view and risks on pakistan. confidence in the economy was restored as the government succeeded in reducing substantially its macroeconomic imbalances in fy2003 - 04 which had reached unsustainable levels in the late 1990s. fiscal prudence and external debt restructuring together helped pakistan reduce its debt / gdp which is currently down to 56 % of gdp below the target of 60 % to be reached in 2013 defined in the fiscal responsibility act, 2005. recent demand pressures stemming from a combination of factors ( i ) the hike in international oil prices, ( ii ) unanticipated costs of reconstruction of earthquake hit region, ( iii ) real increase in development spending of physical and social infrastructure that has been for years neglected and ( iv ) import requirements of fast expanding industry. these factors together strained the external and fiscal deficit that rose to 3. 9 % and 4 % of gdp, respectively in fy06. while these deficits have been financed properly as government ’ s realization of tax collection and external debt flows were supplemented by significant growth in non debt foreign inflows following the sale of state assets and fdi. heightened business activity coupled with aggressive growth in financial industry prompted an unprecedented rise in private credit, stimulated not only by corporate sector but also by growth in agriculture, sme and consumer financing. the demand pressures from both public and private sector manifested themselves in rising inflationary pressures in the first half of 2005. recognizing the lingering impact of past few years ’ easy monetary policy and the emergent demand pressures, the central bank now for almost 18 months has adopted a tight monetary policy stance. combination of rise in policy discount rate twice, rise in reserve ratios and proactive open market operations together have helped effective liquidity management. inflationary pressures have come down significantly. most distinct is the decline in core inflation though food prices have been volatile largely because of distributional disruptions. maintenance of price stability calls for retaining tight monetary policy. the government plans to finance its domestic and external current deficit from the non debt flows which have been buoyant given the strong international interest in pakistan from all parts including oil exporting gulf countries. pakistan is

_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ narodna banka slovenska communication section closing remarks by mr ludovit odor, deputy governor of narodna banka slovenska at the conference 10 years of the €uro in slovakia international conference to mark the 10th anniversary of the introduction of the euro in slovakia bratislava, 11 january 2019 ladies and gentlemen, let me begin by thanking all the conference speakers and participants for frank and lively discussions. usually at such anniversaries everybody says everything is fine and the future is bright, but these discussions were really balanced, and i liked that. we talked about opportunities, but also about some possible problems in the future. i will try to summarise the main messages from my point of view. the first issue is the euro itself. when talking about the euro, we heard that it ’ s not just an economic concept, but also a political project. some called themselves proud members of the euro area. so, it ’ s not just about economic numbers. if we look back at the things said before the creation of the euro, they included some very pessimistic projections. for example, milton friedman gave it ten years at the most. other voices, however, were very optimistic about the common currency. they expected a huge increase in trade and an endogenous convergence effect. they said that while the euro area may not be the best or an optimal currency union, once countries joined it, they would endogenously converge towards each other. today, after twenty years, we see something in between these opposite views. turning to the euro adoption strategy, it was made clear in the presentations that the strategy in slovakia was very ambitious. when the central bank and finance ministry began talks on this issue in 2003, we were light years away from fulfilling all the maastricht criteria. in the end, the decision to seek euro adoption was a good one and the timing of the adoption was also excellent. of course, we were lucky to some extent, but that ’ s part of life. as regards the strategy, it was noted today how slovakia benefited from the euro even before adopting it. euro preparations acted as a catalyst for structural reforms and public finance consolidation