below 2 %, and of the central bank ’ s press conference. and the same is also true of the tradition of the bundesbank, the banque de france and other european central banks to voice their opinion on fiscal policy. this has proved to be worthwhile. the reason that we are experiencing such great difficulties and that we have this government debt crisis is that for too long the governments of the advanced economies and of europe in particular did not live up to their fiscal responsibilities. what exactly caused the ecb to step in? there was a decision to expand the rescue fund, the european financial stability facility, and to broaden its mandate so that it can purchase government bonds. all 17 heads of state or government signed up to this decision. there were then delays, and so the ecb once again found itself in a situation where it had to intervene in the bond market in order to safeguard the transmission of monetary policy. we had to act decisively vis - a - vis savers and investors throughout the world. we had to send a message to governments about what, in our opinion, could be done in order to retain the confidence of the markets. but we never act as a substitute for the governments ’ responsibility and decisions. will the ecb not stretch itself too far through the politicisation of its role? we are not politicising our role. we are executing our monetary policy responsibly in accordance with the treaty, fully in line with the european tradition as regards our call for sound fiscal policies, at a time of the worst crisis since the second world war. the europeans are making history. there has never before been an attempt to bring together 17 countries, including the world ’ s third, fourth, sixth and eighth largest industrialised economies. this is, of course, ambitious. and the crisis is acting in advanced economies as an x - ray picture : it is revealing the weaknesses of all. in our case, it is the weaknesses of the governance of economic union. but why is the ecb constantly seen at the centre of the action and on the political stage? the ecb is the most developed institution of integrated europe, and the institution that is fully able to take action. something that also plays a role is the fact that europe ’ s capitals – unlike us – may not have at all times a complete and immediate picture of the crisis situation. from this institution, we have the complete picture, worldwide and in europe. it is simply our duty to

. the success of norway has been built on the foundation of effective revenue management, welldefined investment strategies, sound macroeconomic management, efficient public institutions with well - defined domains of responsibility, accountability and transparency, good governance and well - defined property rights. i would like to highlight three issues which will be especially critical to the sound management of oil revenues in uganda, and which i am sure will receive a lot of attention in this seminar. first, the revenues accruing directly from oil are finite ; our oil reserves will be eventually exhausted. this means that, if the oil revenues are consumed rather than being invested, living standards in uganda may rise in the short term but this will not be sustainable. if the oil revenues are to be harnessed to generate a sustainable increase in living standards, a bis central bankers ’ speeches substantial part of them must be invested outside the resource sector in physical, human and environmental capital, including education, health care, roads and railways. by saving and investing the revenues from its non renewable oil resources in an optimal manner, uganda can expand its stock of capital and thus lay the foundations for higher output and improved living standards over the long term. the optimal use of oil resources requires policymakers to reach often politically difficult decisions in response to questions such as : what is the appropriate balance between consuming and saving resources? and how quickly should the resources which are saved be invested in physical capital formation in uganda? the answer to the latter question depends on the capacities of our economy to implement investment projects efficiently ; capacities which are currently very weak, as is evident from the poor implementation record of many donor funded projects. there are pressing demands to invest more in infrastructure, especially in the transport and power sectors, but before we scale up public investment, we need to invest resources in strengthening our capacities to implement public capital projects ; capacities for project evaluation, public procurement, project management, etc. if we ramp up public investment too quickly, at a rate which outstrips our implementation capacity, we risk wasting our precious resources on public projects which have very low or even negative rates of return. the second issue which i want to highlight pertains to the potential for dutch disease. the spending of oil revenues is likely to cause a real exchange rate appreciation, which could damage the competitiveness of the non oil traded goods sectors of the economy, including both exporters and manufacturing firms which compete with imports. the faster is the expansion of public spending out of oil revenues, the more disruptive