the usa still faces large current - account deficits of up to 5 per cent of gdp. by definition the counterpart of a current - account deficit is a savings deficit. the interesting aspect in the usa ’ s case is that since 2000 the federal budget has swung from a surplus to a deficit of around 3½ per cent of gdp, so that the savings deficit no longer relates to the private sector, but primarily derives from the public sector. this is reminiscent of the situation that in the 1980s was termed “ the twin deficits ” : the current - account deficit is “ twinned ” by a large government deficit. especially international organisations and european economists have begun to describe these deficits as a structural problem for not only the usa, but also for the global economy. the americans apparently do not consider this to be a fundamental problem. from a european viewpoint, a particular concern is that if this development continues the dollar may fall substantially, thereby hampering european exports and making a further contribution to the slowdown in europe. higher savings in the usa will create other problems, however. the classical solution to this deficit problem is, as in denmark ’ s case in the second half of the 1980s, a strong tightening of economic policy and thereby a reduction of domestic demand. however, if the usa were to follow this course today, this would exacerbate the international problem of excessively weak demand, and thereby growth. how is demand to be stimulated? neither japan nor europe are making any significant contributions to growth in current years. the development in asia, which seemed so promising in 2002, is now subject to uncertainty because nobody really knows whether sars will cause growth to be seriously undermined. all over the world, people are hoping that the economic upswing will come from the usa. to paraphrase a central - banking term, the usa has the role of the world ’ s “ spender of last resort ”. the danish economy is not particularly “ european ” in current years, in terms of the situation in the euro area. from 1994 to 2000, denmark ’ s economic development was sound, unemployment was reduced, and a favourable current - account surplus was achieved. concurrently, the development in prices was moderate. growth has been a little weaker in recent years, however. nonetheless, the reduction of unemployment achieved in the second half of the 1990s has not been jeopardised. public finances and the balance of payments continue to show sound surpluses. danmarks nationalbank has therefore characterised the

helps to explain the upswing in 1994. as stated, denmark ’ s economic situation today is significantly better than in 1993. if the slowdown becomes more pronounced in the near future, public finances, via the automatic stabilisers, will themselves help to stimulate the economy. the automatic stabilisers in the danish economy are rather strong compared to many other countries, and when they come into play in a downturn, the surplus on government finances will diminish. however, since the starting point is the strong budget balance that denmark has built up in recent years there is also scope to allow this to take effect when the economy dampens. finally, there is one similarity between 1993 and the situation today in that the low interest rate stimulates the economy. this will not only affect business investments since the current wave of conversions will help to reduce homeowners ’ interest expenditure, as was the case in 1993. this will stimulate the households ’ consumption and their maintenance and modernisation of owner - occupied homes. in view of denmark ’ s fixed - exchange - rate policy danish interest rates closely match european interest rates. as the euro area ’ s cyclical position is weak, the monetary - policy interest rates are very low, and therefore the financial conditions are more relaxed than danish factors alone would indicate. four years ago, danmarks nationalbank made a number of adjustments to the monetary - policy instruments. this e. g. entailed that mortgage - credit bonds, like government bonds, can be pledged as collateral for danmarks nationalbank ’ s monetary - policy lending. on the same occasion, without any relation to the adjustment of the lending basis, the mortgage - credit institutes also became monetary - policy counterparties on an equal footing with the banks. in my speech at the annual meeting of the association of danish mortgage banks in 1999, i stated the following : “ danmarks nationalbank expects that the mortgage - credit institutes will not only use this access to accommodate their own liquidity requirements, but will also actively contribute to broadening and revitalising an already well - functioning money market. ” i would like to take this opportunity to remind the mortgage - credit institutes of this. in the view of danmarks nationalbank, the mortgage - credit institutes could be rather more active participants in the money market, and also utilise the related earnings potential. it will be in all parties ’ interest to have more players in this market, and that these are participants with a different liquidity profile,