I would like to emphasise that the performance of the French economy was above the averages for the euro area as a whole, where 2.4% growth was recorded, and the large countries of the European Union. In parallel to this strong recovery in activity, the current account surplus remained high, with France having the second largest in the world. In 1999, as in 1998, the good competitiveness of the productive sector thus remained one of the main pillars supporting French economic growth. The acceleration in economic growth during 1999 enabled the creation of 375,000 dependent jobs in market services. The number of jobseekers fell by 11.4% and the unemployment rate decreased from 11.5% of the labour force in December 1998 to 10.6% at the end of 1999, the lowest level recorded since 1992. Inflation quickened somewhat, especially at the year-end, whilst remaining within limits compatible with the objective of stability (namely less than 2%) assigned to monetary policy. According to the Harmonised Index of Consumer Prices (HICP), which is the measure of inflation adopted for the countries of the European Union, the rise in prices in France reached a twelve-month rate of 1.4% in December 1999, as against 0.3% a year earlier. This increase can mainly be explained by the sharp 20.6% annual rise in oil product prices.
In fact, with the measures adopted last year and specific factors cleared out, the money market’s interest rates have shifted toward levels in line with the current and forecast levels of the policy rate (figure 1). Beyond the recent measures, the Bank has at its disposal a toolkit it can use when the need arises. On one hand, in the years 2008 and 2009 we devised new ways to provide domestic and foreign currency liquidity which can be activated quickly but which in the present conjuncture have not been thought necessary. In case of a worsening of external financial conditions, the Central Bank has to possibility of alleviating its effects by using a number of guaranteed financing instruments, such as swaps, long-term REPOs and collateral extension, among others. Moreover, there are reserves available of close to 40 billion dollars, augmented with the reserve hoarding plan we carried out in 2011 and which has helped to strengthen the liquidity position of the Chilean economy. It is worth noting that these measures are an alternative for providing subsidiary support, whose adoption is warranted only in the presence of major distortions in monetary and financial markets. In this complex environment, agents, banks, financial intermediaries and firms need to carefully evaluate the associated risks and take prudent action to properly manage their liquidity and financial risks. Any hasty behavior of the authority may mistakenly signal bad conditions to a market that is operating normally.