Stefan Ingves: Comments on “An evaluation of Swedish monetary policy 1995-2005” Speech by Mr Stefan Ingves, Governor of the Sveriges Riksbank, at the Riksdag Committee on Finance, Stockholm, 30 November 2006. *  *  *  Thank you for the invitation to come here! I would like to begin by thanking the authors, Professor Giavazzi and Professor Mishkin, for an interesting and comprehensive report. As we at the Riksbank have said earlier, we consider it a very good initiative by the Committee on Finance to commission two highly qualified external experts to make an evaluation of the monetary policy conducted over the past decade. As the Riksbank has an independent position, it is important that monetary policy should be regularly examined and evaluated. The Committee on Finance makes its own evaluation of monetary policy every year, but I nevertheless think it is a good idea to occasionally supplement these evaluations with reports made by external experts. It is a particular advantage that two foreign academics have carried out the examination. This gives an outside perspective on Swedish developments, which can be very valuable. As you can see, the report is fairly comprehensive and it is therefore impossible for me to mention all of the aspects that are covered. Let me just say as an overall comment that I feel the report has been very pleasant reading. Although the authors express criticism on some points, it is clear that their overall impression of Swedish monetary policy is very positive.
In this context, the parallel commitments of the major political parties to the continued provision of free health services for all and to prudent fiscal policies are not easy to reconcile. Much the same can be said of higher education, which is characterized by a student subsidy system that is probably unique. The University of Malta and MCAST have together been allocated Lm15.5 million for 2007, compared with no less than Lm8 million budgeted for students’ maintenance grants. Funds that would permit these institutions to offer better quality programmes, and in the process hopefully raise the number of science and technology graduates from its current inadequate level, are instead paid to students regardless of their financial means. Changes needed in the pattern of resource allocation This generous approach to the management of public finances has meant that recurrent revenue, although higher year after year, has often not been able to keep up with recurrent expenditure. For example, in 2005 expenditure amounted to 41% of GDP, roughly matching revenue at 42%. As a  1  A recent paper on public sector efficiency in the new EU Member States gives Malta a relatively high score in terms of public sector performance that measures outcomes. However, when performance is related to the inputs used to gauge the efficiency of the State, Malta ranks 21st in a pool of 24 countries including all 10 new Member States, Greece, Portugal, Ireland and a number of emerging market economies.