in december 1998, after 6. 6 % a year earlier. against a background marked by uncertainty surrounding the international environment and by prospects of a euro area - wide slowdown in activity, on 3 december 1998 the monetary policy council of the banque de france, in close dialogue with the other members of the european system of central banks ( escb ), decided to cut its main key rate, which had been set at 3. 30 % since october 1997, to 3. 0 %. this decision was inspired by three considerations : – – – the need to ensure the cohesion of the euro area in the best possible conditions ; the need to organize the convergence of short - term rates towards the lowest rates in the area, i. e. in particular french rates ; the need to choose the level of key rates that was most appropriate at the time of entry into the euro. this decision constituted a further stage in the process leading to the transfer of responsibility for monetary policy to the european system of central banks as of 1 january 1999. in fact, the rate applying to the first main refinancing operations of the escb was set at 3 % on 22 december 1998 by the governing council of the ecb. after five years of independent conduct of monetary policy, the banque de france has earned a high degree of confidence, as witnessed by the solidity of the franc and the relative level of french longterm interest rates. the bank is proud to have been able to transmit this confidence to the euro, along with other central banks forming the core of the european exchange rate mechanism. nineteen ninety eight was a successful year for european integration : the remarkable convergence of european economies enabled the historic decision by heads of state and government to commit eleven countries to the road to the euro. the date of 4 january 1999 marked a first technical success in the changeover from national currencies to the euro. the major challenge now facing the euro area as a whole is to permanently guarantee good economic and financial performances. it is no longer a question of victoriously overcoming an obstacle, but of efficiently managing the monetary, fiscal and structural areas over the long term. this is naturally indispensable in order to ensure cohesion, stability, prosperity and consequently a reduction in unemployment in the euro area, i. e. in an area with 291 million inhabitants. and this is also a contribution necessary for the stability and prosperity of the world economy, within which europe will play a central role, like the

crippling sudden stops. the more difficult question is this : how will countries adjust to the ever - changing global circumstances, and what does this mean for their growth and development trajectories? let me set out some challenges / difficulties. first, a number of countries are running sizeable deficits on their fiscal and current accounts. countries with larger deficits have tended to experience more currency depreciation this year, which speaks to their vulnerability to changing global financing conditions – especially higher interest rates. reducing this vulnerability will require deficit reduction, as well as changes in the composition of spending that benefit longrun growth and therefore improve countries ’ future capacity to repay debt. this adjustment process is likely to be difficult, both for political economy reasons and because macroeconomic adjustment can hurt short - term growth, specifically via reduced demand or through import compression. rebalancing is therefore inevitable …. 1 this point was made in the latest international monetary fund world economic outlook, chapter 3. see https : / / www. imf. org / en / publications / weo / issues / 2018 / 09 / 24 / world - economic - outlook - october2018 # chapter % 203. page 2 of 8 second, there are pockets of prominent emerging market countries where growth has stalled. looking back over the past two decades, the 2000s were an era of unprecedented growth for emerging markets. the share of economies converging on rich - country living standards also reached new highs, demonstrating that this was more than simply ‘ a china story ’ or ‘ an india story ’ – important though those countries are. this record of success survived the global financial crisis, but only by a few years. from approximately 2013, emerging markets began to slow steadily, and some experienced protracted recessions. outside of asia, the emerging market story is now largely about subdued growth, and some countries are talking about lost decades. we need to find a way back to growth. the third problem follows when politics catch up with economics. in advanced economies and emerging markets alike, dissatisfaction with economic outcomes has generated political developments that would have been very unlikely, if not unthinkable, even half a decade ago. sometimes these reactions have made things worse, or threaten to do so, creating a vicious circle of bad economic decisions and further political disaffection. these problems – macroeconomic disequilibria, stalled growth and political feedback loops – add up to a difficult set of circumstances for the emerging markets. today, i