and growth pact obliges participating eu member states to achieve budgetary positions close to balance or in surplus in a sustainable manner, in order to minimize the risk of breaching the budget deficit criterion of 3 % of gdp, according to the treaty of maastricht, in the course of a business cycle. sound budgetary positions not only create enough leeway for automatic stabilizers to take full effect in economic slumps, they also contribute to reducing the debt - to - gdp ratio and consequently the interest burden for governments, increase investors ‘ confidence in the euro area, keep interest rates lower than they would otherwise be and, as a consequence, lead to a crowding - in of private investment. thus, the current economic slowdown should not distract governments from the successful consolidation process we have witnessed so far. ladies and gentlemen, perseverance in structural reforms of product, capital and labor markets constitute an important foundation for vibrant and strong euro area economies, underpinning the euro as an anchor of stability. product markets in the european union have already undergone sizable improvements, though we should not underestimate how important it is to fully implement internal market legislation and, for example, further reduce state aid. in concert with independent and powerful competition authorities, these types of measures would not only help make economies more efficient and competitive, but would also play their part in ensuring price stability. in addition, it is of utmost importance that the eu continues to be committed to trade liberalization and that we support the opening of a new trade round within the wto. moreover, the introduction of the euro has accelerated structural reforms in the european financial markets. apart from making financial markets less fragmented and more competitive, it is important that these developments lead to an efficient and stable financial system. the recent tragic events in the united states have shown how quickly financial markets can come under severe stress – and that sound and well supervised markets, with the backing of liquidity provided by central banks, can cope even with such dreadful events. as regards labor markets in the euro area, continuing high structural unemployment and low participation rates in many member countries are a cause for concern. obviously the functioning of labor markets needs to be improved to allow higher employment. wage settlements in line with productivity developments appear crucial for the attainment of a sound macroeconomic policy mix. the social partners are called upon to continue to act in a responsible manner, thereby enhancing prospects for healthy growth and employment. if the just mentioned macroeconomic and structural safeguards are

##ation rate fell from 78 % in february to 56 % in march, which is the lowest rate ever recorded in the survey. in services, the greatest slump was seen in accommodation and catering. construction sector activity also deteriorated significantly, as a number of construction projects were put on hold at the beginning of the lockdown period ( slide 3 ). in short, at the end of march, the economy was running at two - thirds of its normal pace. this means that every two weeks of lockdown “ costs ” us approximately 1. 5 % of lost annual gdp and at least 1 % of additional government deficit. ii. building the appropriate economic policy responses 2. 1 the emergency : rapid, strong and convergent responses during the crisis confronted with this unprecedented, and totally unforeseeable crisis, rapid, strong and convergent responses were implemented across the board in fifteen days to stem the effects of a severe economic shock. the lessons of 2008 have not been forgotten. seldom has there been such a solid consensus on the direction and the scope of the measures to be taken, including among economists, which is quite rare. in france, we have put in place a shield to protect businesses of all sizes and to help them get through this shock, which in turn protects their employees. this “ cash shield ” is fashioned from both unprecedented fiscal and monetary measures. the fiscal measures put in place by the government primarily revolve around deferring payments of taxes and social security contributions, a solidarity fund for the self - employed and above all initiatives for those in partial employment – formerly referred to as “ technical unemployment ”, but we have fortunately inverted that description. france has thus learned from the success of germany and its kurzarbeit in 2009. our arrangement – currently the most generous and costly in europe – should avoid what has started to happen in the united states : ten million job losses in fifteen days and possibly a lot more tomorrow ; it protects employees and their incomes and maintains production capacities for the future recovery. the measures also include state - guaranteed loans, up to a total of page 3 of 8 eur 300 billion, repayable over one to five years and for an amount covering up to 25 % of annual revenue. overall, banks are playing their part, but the credit mediation scheme ’ s services, under the aegis of the banque de france, are involved and ready to assist any businesses experiencing difficulties. already, each week we are receiving over ten times more cases than last year.