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. the social model that we share in the eurozone combines a high level of public service, relatively low levels of inequality – much lower than in the united states – and a good intensity of social dialogue. call it “ social market economy ” if you want, without prejudice to the intense and legitimate debate within the uk today. page 2 sur 5 in france, growth has started to pick up, reaching 0. 6 % and 0. 5 % in the second and third quarters of 2017 respectively. however, despite strong job creation, the unemployment rate is still high, at 9. 4 % in the third quarter of 2017. therefore, stepping up reforms is now a priority in france too, with a focus on two main areas : sustainably consolidating our public finances, and aiming to achieve a structural economic transformation, with a major simplification effort in the labour market, and large - scale investment in education, vocational training and apprenticeships. the new government, under mr. macron ’ s presidency, has made decisive steps in that direction. i stress this as an independent central banker. as regards public finances, france still has one of the highest public spending levels among oecd countries, at 56 % of gdp in 2016. the french government is committed to reducing this ratio by 3 gdp points within the next 5 years. besides, measures have been taken to keep public deficits below the threshold of 3 % of gdp. for the first time in 10 years, the government deficit should be below this threshold in 2017 ( 2. 9 % ). 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

removing the zero lower bound constraint on expectations of future short - term interest rates, they contribute to easing financial conditions by lowering rates along the curve, with a positive impact on the demand for credit by firms. second, the negative deposit facility rate ( dfr ) positively interacts with asset purchases. indeed, the portfolio rebalancing effect of qe is reinforced by the negative dfr, as banks with excess liquidity holdings have a stronger incentive to put their reserves to work. and, so far, we have not seen significantly detrimental effects of negative rates on the profitability of banks, notably thanks to the favourable fact that the slope of the yield curve has remained positive. 3 / our forward guidance provides further indications as to the future path of our monetary policy ; and by steering expectations, it has an impact on the yield curve. our forward guidance is clear as to the sequencing : “ we expect [ the key ecb interest rates ] to remain at their present levels for an extended period of time, and well past the horizon of our net asset purchases. ” there is no doubt within the governing council about this sequencing. in all events, we should not consider raising interest rates until we have reached a sustained adjustment in the path of inflation. page 6 sur 8 4 / the fourth instrument is the provision of liquidity to financial institutions. in october 2008, we introduced the fixed - rate full allotment policy in all our regular refinancing operations. the maturity of this liquidity provision was then extended with the launch of 3 - year longer - term refinancing operations ( ltros ) and, later, targeted longer - term refinancing operations ( tltros ). in september 2017, a total of eur 760 billion is still lent to euro area banks through tltros, which at over 7 % of euro area gdp is substantial. iii. supplementing monetary policy in europe for the future, we can be confident, because our monetary policy is effective and recovery is robust. but our confidence must be without complacency, because monetary policy cannot be the only game in town : it must be supplemented by national reforms, and by a strengthening of the euro area. we have been saying this for a long time, but now is the time to act. now is the time to act in france, where stepping up reforms is a priority, with a focus on two main areas : on the one hand, sustainably consolidating our public