The State, in particular, has not reduced staff numbers in proportion to the posts transferred to decentralised authorities, whereas the latter have recruited on a large scale to fill these positions. Demographic developments provide an opportunity to turn this trend around and create more flexibility. Recent announcements stating that half the posts left vacant following retirements are not to be filled show that this opportunity will be seized. •  Lastly, maintain cyclical flexibility. France, as we mentioned, is currently at a favourable point of the business cycle that automatically increases government revenue and, all other things being equal, reduces the deficit. This gives an impression of affluence that may be misleading and dangerous. What counts here is the general government structural balance. In our country, it is high (above 2% of GDP), which means that our public finances are particularly vulnerable to an economic slowdown or a turnaround in the business cycle. In such a case – unless we are prepared to enter an endless downward spiral – even the forward-looking spending would have to be sacrificed. One imperative must ultimately dominate the management of public finances: the well-being of future generations. It is they who will have to sustain, service and finance the public debt that is building up today. It may be understandable and justifiable if this debt were used to establish an economic capital that would benefit these generations. But this debt would be economically inefficient and morally unjust if future generations had to finance current generations’ welfare spending.

Such a transfer would be especially paradoxical since sustainable development has become a key priority and the quality of the environment passed on to future generations has never before to such an extent inspired and guided public action. * The French economy must now be allowed to fulfil its potential. While globalisation offers opportunities, it also creates numerous insecurities. The accumulation of such sentiment may result in slowing down or preventing the necessary reforms. But because the world economy  6  BIS Review 92/2007  is changing rapidly, the refusal to adapt would lead, inevitably, to weaker growth for France and greater insecurity for all French citizens, especially those that are least protected. This dilemma is not peculiar to France. All the other European countries are experiencing this friction between the natural desire for greater security and the unavoidable need to adapt. It is important for each country, according to its traditions and culture, to find the means of taking up this challenge. However, France boasts numerous and decisive advantages: Europe’s most dynamic demography; a high level of energy independence, which is an inestimable advantage in these times of economic and geopolitical uncertainty with regard to supplies; active and dynamic companies, which have been able to take ample advantage of the opportunities afforded by globalisation; and lastly a highly-skilled workforce which, to some extent, accounts for France’s high hourly productivity levels. These advantages must therefore enable France to achieve strong growth that creates jobs in a stable monetary environment. This opportunity must be seized.