Long-term yield spreads on Germany and central government debt in 2002 as a percentage of GDP for Finland, Italy and Sweden 250  250  120  120  200  100  100  150  80  80  100  100  60  60  50  50  40  40  0  0  20  20  -50  0  Finland  200  Italy Sweden  150  -50 1997  1998  1999  2000  2001  2002  2003  0 Finland  Italy  Sweden  Sources: Eurostat and the Riksbank. Chart 2. Productivity growth in the corporate sector and the output gap in Sweden 8  8  6  6  4  4  2  2  0  0  -2  -2  -4  -4  Productivity, corporate sector Output gap  -6  -6 -8  -8 75  78  81  84  87  90  93  96  99  02  Sources: Statistics Sweden and the Riksbank. BIS Review 42/2003  5  Chart 3.
It had shown an increase of 3.7% in December 1997. Financing raised on the domestic markets progressed vigorously, with the year-on-year advance standing at 9.2% in December 1998, after 6.6% a year earlier. Against a background marked by uncertainty surrounding the international environment and by prospects of a euro area-wide slowdown in activity, on 3 December 1998 the Monetary Policy Council of the Banque de France, in close dialogue with the other members of the European System of Central Banks (ESCB), decided to cut its main key rate, which had been set at 3.30% since October 1997, to 3.0%. This decision was inspired by three considerations: – – –  the need to ensure the cohesion of the euro area in the best possible conditions; the need to organize the convergence of short-term rates towards the lowest rates in the area, i.e. in particular French rates; the need to choose the level of key rates that was most appropriate at the time of entry into the euro. This decision constituted a further stage in the process leading to the transfer of responsibility for monetary policy to the European System of Central Banks as of 1 January 1999. In fact, the rate applying to the first main refinancing operations of the ESCB was set at 3% on 22 December 1998 by the Governing Council of the ECB.