This process of rationalization, which occurred only a few years before the start of the crisis in 2008, made the overall economy resilient and in a better position to weather adverse events in external markets. Post-2008 growth was enabled by the smooth entry into the Euro area, which coincided with the start of the crisis in 2008. The transition was facilitated by the fact that in the preceding decades, there was no recourse to monetary financing of government debt, generally no recourse to currency depreciation to offset internal competitiveness issues, while fiscal policies were in large part prudent. BIS central bankers’ speeches  1  Another consideration relates to the growth of new sectors which improved the capacity of the economy to offset downturns in external demand. Diversification is often more difficult to achieve in relatively small economies. However, the degree of diversification in the private sector in Malta is remarkable, and has resulted primarily from the growth of financial services, internet related services and aviation servicing, along with the reorientation of both the tourist sector and manufacturing. Although we have experienced higher GDP growth, we must be aware that some of our competitors are starting to benefit from the structural reforms and internal devaluation that they went through in response to the impact of the financial crisis on their economies. Chart 2 displays unit labour costs in the Euro area since 2002, distinguishing between the stressed economies and the relatively unstressed ones. The path of Malta’s ULC is displayed separately.
And, I would like to invite all of you to tomorrow’s dinner to commemorate its achievements in the past quarter of a century together. Ladies and Gentlemen, May I take this opportunity to wish all of you a successful and fruitful deliberation, and an enjoyable stay in Thailand. Thank you. 2  BIS Review 88/2007