Today, I will first elaborate on two challenges that will continue uniting us: the need for good national economic policies, pro-business and long-term oriented; and the need for active multilateralism to face our global challenges. Then, I will dwell on a challenge that we will have to address together: our future relationship and Brexit. ** I. The need for pro-business and long-term national economic policies  Let me start with the challenge of national economic policies. In the euro area, the economic recovery is now robust and broadly-based across countries and sectors. GDP growth should stand at at least 2.2% in 2017 according to our ECB forecast. The ECB’s accommodative monetary policy has contributed to this acceleration of growth in the euro area. Yet monetary policy cannot be the only game in town. Structural reforms in each country, along with stronger European coordination, are of the essence to boost potential growth in the medium term and to treat the fatal disease of mass unemployment. In recent years, several European countries, including in Southern Europe, have successfully carried out in-depth reforms that are yielding positive results in terms of growth and employment. Germany, the Netherlands and Nordic countries, as well as Spain and Portugal, are proof that economic success, a solid single currency, and the European social model are compatible. We should run pro-business, long-term oriented, fiscally sound economic policies, while keeping the core elements of a common social model, which can be the DNA and pride of Europe in this highly divided world.

Needless to say, these efforts have to be pursued in the future, as the European Commission stressed yesterday while acknowledging the progress France had already made. As regards the structural transformation, the government has decided to act rapidly by passing legislation by decree in the first months of its mandate. A substantial labour market reform was approved last summer and has already been implemented. It provides more flexibility to firms by giving social partners more room for negotiation and reducing uncertainties regarding contract terminations. Moreover, measures were announced to promote employment by reducing labour costs: the transformation of the CICE – credit tax for competitiveness and employment – into a permanent reduction of social contributions, and the transfer of social contributions financing health and unemployment insurance to a flat income tax with a larger base (CSG). In addition, measures have been taken to reduce the tax burden on investment; the abolition of wealth tax on all financial investments, the reduction of the corporate income tax towards the EU average or the flat tax at 30% on capital income. By supporting equity financing, these measures should hopefully enhance the creation and development of firms, especially innovative SMEs. Funds will be devoted to vocational training. A forthcoming reform of vocational training and apprenticeship is expected next year, which is badly needed as the French economy is still experiencing labour shortages despite high unemployment. These reforms should have a significant impact on growth and employment in the long term. Page 3 sur 5  II.