These are the type of issues we should discuss now that we actually have a system where stabilisation policy no longer contributes to creating severe economic fluctuations – as it did in the 1970s and 1980s – but instead seems to actually have a stabilising function. How should roles be allocated between fiscal policy and monetary policy? The change in regime in the 1990s involved the introduction of a distinct allocation of roles in Swedish economic policy. The exchange rate remained variable and monetary policy was given the main task of trying to keep inflation at a low, stable level. Fiscal policy, which had often resulted in large deficits under the previous regime of a fixed exchange rate, would now instead be targeted at achieving long-term stability and sustainability in public finances. Corresponding changes in economic policy had been made in many other parts of the world. It is often said in the economic debate that one consequence of the change in system was that “the Riksbank was given responsibility for stabilisation policy”. As it is not always clear what is meant by this exactly – the interpretations appear to vary depending on whom is asked – it may be worth providing a brief summary of the inflation-targeting policy we conduct. The Riksbank’s primary objective is to maintain price stability. This task often goes hand in hand with a stabilisation of the real economy; if demand in the economy develops in line with the long-term potential, it will often contribute to a stable development in inflation.
Approximation with best EU central bank standards and practices is a crucial process for a central bank not only for the effective discharge of the duties, but also for the efficient and stable functioning of the financial system, and benefit of the economy, overall. I am confident that the implementation of this project will be characterised by the cooperative spirit between the Bank of Albania and central banks in the region, on the one hand, and the European Central Bank and Eurosystem, on the other. I would like to conclude with a heart-felt appreciation and gratitude for all the stakeholders having an active role in the launching of this project: •  the European Central Bank for coordinating all the activities;  •  member central banks for providing a large number of experts to assist us with the project implementation;  •  Delegation of the European Union in Tirana for funding it. 2  BIS central bankers’ speeches  We highly appreciate the Commission’s assistance with regard to adopting the implementation of the European Union legislation and are seriously committed to continuing with the successful cooperation, established with the Delegation in the last twinning project. In this context, I would like to reiterate my message that the road to European Union integration passes through regional integration. The financial system and central banks spearhead this process. We expect that public and private economic agents will determinedly follow this step we are taking.