Suppose one would have claimed at that time that inflation from 1995 and seventeen years onwards would be on average just below 2 per cent and much more stable, and that growth during this period would not be lower than before, but on the contrary somewhat higher. I am pretty sure that one would have been met with considerable scepticism. And very few would probably have characterised a monetary policy that contributed to this as unsuccessful. This is a rather different picture than the one on which the criticism of tens of thousands of “lost jobs” is based. The latter instead appears to view the relatively limited undershooting of the target as a major failure, without any real mitigating circumstances. It also appears to assume that the Riksbank for some reason has intentionally and systematically aimed to attain a lower inflation rate than the 2 per cent it has itself set as the target. It is difficult to see the logic in such behaviour. And it is definitely not something that I recognise after working at the Riksbank at various times over the past fifteen years. Wages not necessarily based on incorrect expectations There are also other objections to the criticism that monetary policy should have cost tens of thousands of jobs. One reason claimed for the unnecessarily high unemployment is that real wages, that is, wages adjusted for inflation, have been higher than they would otherwise have been if inflation had been on target.
The savings tax example also shows that even a small country like Luxembourg can, through its membership in the  22  Guinea-Bissau, for example, has a GNP per capita of only $ whereas countries such as Brunei, Cyprus, Malta and Qatar have a GNP per capita of more than $  23  These include Andorra, Liechtenstein, Monaco and San Marino. The US is trying to resist the move. In July 2002 the Treasury Department in fact withdrew a draft law which would have made it compulsory for American financial bodies to provide extensive information on savings income invested in the United States by non-residents and replaced it with a less onerous law that limits the extent of information and the number of countries to which it would apply. 6  BIS Review 69/2002  EU, succeed in getting a larger country to give up some of the competitive edge it enjoys in a particular sector. It is to be expected that similar manoeuvres will become more frequent in an enlarged EU. Having a voice in setting the rules would then assume paramount importance, especially since the other new members, who are Malta’s competitors in several areas, would themselves be seeking to advance their own interests. This, in turn, also casts doubt on whether Malta would be able to obtain transitional arrangements and derogations comparable to those it has obtained thus far if it had to negotiate with the EU when Bulgaria, Romania and Turkey have become members. This leads to my third conclusion.