The need for further fiscal adjustment is clearly emphasized in the latest available IMF country reports. The screening shows that with exception of two countries (Romania and Lithuania) all the countries should adjust further. According to the IMF, most of the countries are in the so-called group of "strong adjustors"7. This means that the governments should have a very "ambitious" agenda, or have to significantly shrink the primary deficit in order to ensure fiscal sustainability. Expectedly, the most indebted countries are amongst the ones where the strongest downward adjustment is envisaged, such as Slovenia, Croatia, Serbia and Albania. However, even if they pursue their consolidation plans, some of them will still have vulnerable position as the debt level will be higher then what the Maastricht criteria prescribes (60% of GDP) - chart 13 lower right and left quadrant. Further fiscal consolidation against the background of still "anemic" economic activity and rising interest rates may be very challenging. 7  Authors’ definition, presented on chart 13. Chart 13: Size of fiscal adjustment -2021-2015*  Debt change and distance from the Maastricht Criteria 60% of GDP** -40  Cumulative change of primary deficit (in p.p.)
Philipp M Hildebrand: Monetary policy situation and economic prospects Summary of a speech by Dr Philipp M Hildebrand, Member of the Governing Board of the Swiss National Bank, at the Centre for Banking Studies, Lugano, 28 September 2004. The complete speech can be found in French on the Swiss National Bank’s website (www.snb.ch). *  *  *  In formulating its medium-term monetary policy, the Swiss National Bank (SNB) must take the uncertainty surrounding the development of the economic environment into consideration. The SNB believes that the economy is well on the road to recovery, both in Switzerland and abroad. For our country, it anticipates real GDP growth of close to 2% in 2004. Sustained growth is also expected for the coming years. Consequently, the utilisation of the economy’s production capacity will steadily improve, while unemployment will gradually decline. The improved utilisation rate will be accompanied by a rise in inflationary pressure in the medium term. This scenario could be revised, however, if new information were to come to light. The SNB will thus continue to monitor economic developments closely and will subsequently draw the necessary monetary policy conclusions. BIS Review 54/2004  1