2  BIS Review 157/2010  14% to over 21% in the last 20 years. 6 This shows just how well Swiss companies – including small and medium-sized enterprises – have diversified their markets in the past few years. But the pie is only so big and the total is always 100%. This means that the share of exports to industrialised countries has inevitably decreased. In particular, Switzerland’s dependence on the European market has declined. Especially countries such as Germany, France and the United Kingdom have lost some of their relevance as export destinations. Switzerland is not alone in experiencing a shift in its market share in favour of emerging economies. This is merely a reflection of the growing significance of these countries for the global economy. 7 Accordingly, many EU countries have witnessed similar developments. There are, however, two very divergent developments responsible for this aggregate trend; both of which proved highly beneficial for Switzerland in dealing with the latest crisis. While many European countries intensified their trade relations with the emerging economies of Eastern Europe as part of the EU’s expansion eastwards (cf. chart 1a), Swiss exporters focused more on the Asian market (cf. chart 1b). As a result, Switzerland’s share of exports to emerging Asia – not including the four tiger economies – practically doubled in the last 20 years, and recently amounted to around 6%, compared to around 4.5% for the EU. 8 Chart 1a  Chart 1b  Sources: IMF Direction of Trade Statistics (DOTS) 9 , Federal Customs Administration (FCA).
If this analysis suggests that monetary developments are a threat to future price stability, monetary policy will respond in a manner appropriate to counter this risk. In parallel with the monitoring of monetary aggregates, the ECB also pays close attention to various other indicators which may signal inflationary risks or tensions: this is the second pillar of the monetary strategy. Indeed, while inflation is a monetary phenomenon over the long term, it is useful in the short to medium-term to detect those inflationary tensions in the economy - reflected in various real and financial indices - which are not captured by monetary aggregates. With these two pillars and the various indicators, monetary policymaking in the euro area may appear complex, but this reflects the complexities and uncertainties which surround the transmission mechanism of monetary policy in modern economies, and, even more so, in the new economic environment created by the changeover to the euro. Against this background, the Eurosystem must rely on a whole range of indicators and on a variety of models which help to sharpen and crosscheck the analysis. The efficiency of monetary policy does not rely only on a careful analysis of the monetary, financial and economic situation, but also on the ability to explain monetary policy decisions to the public in a convincing manner.