On the surface, this is indeed what happened in these countries. With the disappearance of the exchange rate premium, the expected convergence process was facilitated by capital flows originating from wealthier euro area countries with higher GDP and capital endowments. Between 1999 and 2008 Greece and Spain witnessed indeed a significant “apparent” convergence of their per capita income to the euro area average.
We thus joined the nearly three dozen central banks and a dozen other international financial institutions that have chosen to entrust the management of some of their reserves to SIP, which currently manages around 90 billion dollars of assets.