The introduction of euro notes and coins will have additional positive effects on the economic development in Europe, as it will be easier to compare prices and confidence in the new currency will be strengthened. Moreover, the euro is to be regarded positively not only with regard to the Swiss economy but also Swiss monetary policy. The Swiss export sector will profit from lower transaction costs, and currency devaluations - as previously implemented by some European countries in order to improve their competitiveness - will be a thing of the past. Swiss monetary policy will benefit from the fact that a large economic bloc now exists in Europe which pursues similar goals in terms of monetary policy. All in all, exchange rate fluctuations between Switzerland and the EMU countries should thus remain below the levels seen before the launch of the euro. Furthermore, the markets will realise in due course that there is no reason why the Swiss franc, with regard to the role as a safe haven currency, should be assessed differently than the euro. This realisation should reduce the risk of sharp appreciations. As a result of the introduction of euro notes and coins, the euro will increasingly be used as a means of payment in the tourism sector and the hotel and restaurant industry as well as in foreign trade, to some degree simply as a substitute for the D-mark.
Finally, I shall elaborate on the new National Bank Law. Economic activity In Switzerland, a turnaround in economic development emerged in the third quarter of 2003. Real GDP exceeded the previous quarter’s level for the first time since the third quarter 2002. Nevertheless, it still fell short of its year-earlier level. The Swiss economy recovered largely in line with our expectations as communicated in our September assessment of the situation. The recovery is attributable to the pickup in global economic activity, low interest rates and generally more favourable exchange rate conditions. This benefited primarily exports, which rose markedly in the third quarter. Equipment investment, too, picked up slightly following a long phase of decline. Private and government consumption continued to have a stabilising effect. The economic situation in Switzerland should improve further in the next few months. We are expecting exports to continue developing favourably, coupled with a robust increase in equipment investment. In this way, the economic upswing in Switzerland will become increasingly broad-based and strengthened. In the course of 2004, unemployment should also fall, leading to a pickup in private consumption. On average, a moderate decline in economic activity will be recorded in the current year, while for 2004, as already stated, we expect the economy to grow by slightly over 1.5%. This will, however, not yet suffice to close the production gap. Production capacities will therefore still not be fully utilised in the coming year. Even though the overall prospects have clearly improved, the situation in a number of industries remains difficult.