The most important concrete instrument for promoting cohesion is, of course, the EU’s convergence criteria for EMU participation: low inflation, low interest rates, a stable exchange rate and balanced government finances. Much has been said and written about these criteria. I have already suggested that perhaps it is not just these criteria as such that are the key to a monetary union that functions properly, although the part they have played in disciplining policy in a number of member states should not be underestimated. But I do believe they have had the important effect of contributing to a greater consensus than before on issues of stabilisation policy. The Maastricht Treaty’s institutional requirements concerning formal central bank independence and the legal infrastructure of the financial sector have also contributed to the consensus that has been achieved and which I believe is central for the proper functioning of EMU. A remarkable degree of economic convergence throughout the EU was achieved in the second half of the 1990s. If one excludes Greece, the gap between the highest and lowest rates of inflation among EU countries narrowed from 10 percentage points in 1990 to 1% point in 1997. In 1995 the gap in the public finances extended from a deficit of almost 8% of GDP in Sweden to a deficit of 2.3% of GDP in Denmark. By 1997 the gap had narrowed to a 0.1% surplus in Denmark and a 3.0% deficit in Spain. The EMU process also led to more similar levels of interest rates.
The Bank is already doing a great deal to address climate risk, and we outline even more ambitious plans for the future. As a long-term and global investor with holdings in thousands of companies, we have a financial interest in companies adapting well to the risks and opportunities presented by climate change. Norges Bank intends to be a driver for change, pushing companies to make the transition to net zero emissions. The companies we invest in reflect the transition that the whole world needs to undergo. The fund as an investor Our characteristics as an investor The climate risk in the fund reflects who we are as an investor and our overall investment strategy. In a nutshell: the fund is large, broadly diversified, long-term and index-based. Chart: Large, broadly diversified, long-term and index-based 70 percent of the more than 12 trillion kroner in the fund is invested in equities, making us one of the world’s largest shareholders. We have holdings in 9,000 companies in 70 countries. And we are a long-term investor. Since only the real return can be spent by the government, the fund could, in principle, last forever. 1/6  BIS central bankers' speeches  Put simply, the strategy for the fund is to strike the best balance between expected return and risk by spreading our investments far and wide and owning a little of everything in the market. There is a solid body of research to support such an approach.