] in europe, economic recovery is underway. europe is continuing to recover, at 1. 7 % in 2016, and is expected to carry on recovering in 2017. euro area growth is robust since it is supported by domestic demand, i. e. household consumption and corporate investment. new more detailed euro area growth and inflation projections will be published on 8 december. it is particularly important to note that labour market conditions are improving and unemployment is receding. in the euro area, on the past 4 years, the unemployment rate has dropped from 13 % to 9. 8 % last october and is at its lowest level in four years. it is still too high but is going in the right direction. for france, after 1. 2 % of gdp growth in 2015, we are likely to see a growth rate above that range for 2016 and 2017. in the short term, we expect growth at 0. 4 % in the last quarter of 2016. the banque de france will publish its new growth and inflation projections for france on 9 december. inflation developments 1 / 3 bis central bankers'speeches [ slide 3 ] inflation, which was nil in the euro area in 2015, rose steadily in 2016 : it should reach 0. 6 % in november. monetary policy has helped and will continue to support a move toward the eurosystem objective of an inflation rate below, but close to, 2 % over the medium term. in addition, oil prices have bottomed out since the beginning of this year and this should directly help inflation to increase beyond 1 % in the first months of 2017. [ slide 4 ] the comprehensive package of measures adopted on 10 march 2016 made euro area monetary policy more accommodative. one of its distinctive features is that it targets the financing of the real economy. the second series of targeted refinancing operations ( dubbed “ tltro 2 ” ), for an amount of eur 444. 6 bn allotted so far, should continue to improve medium - term funding conditions for banks and foster bank lending to companies and households. 2 / structural policies progress has also been made regarding structural reforms. several european countries, including germany and spain, are showing the way forward to europe. they have succeeded in carrying out wide - reaching reforms that are compatible with our common european social model, which combines high standards of public service and relatively low levels of inequality – much lower than in the american society. progress has been made in all four key areas : enterprise, employment,

to this mission by the french government and already came twice to tokyo in the last months to convey this very concrete message. 3 / how can we give further impetus to europe? getting back to the european level, i would like to point out that many improvements have also been made in the field of crisis prevention and management. prevention is based on much more 2 / 3 bis central bankers'speeches efficient financial regulation and on a european governance framework that is better organised now with well - designed monitoring mechanisms on fiscal performance as well as on macroeconomic imbalances and structural reforms. banking union contributes to strengthening financial stability in the euro area and the eu as a whole and to ensuring that the banking sector is safe and reliable. the global european picture is of substantially enhanced resilience since the crisis. the common equity tier 1 ratios of significant banking groups in the euro area have risen from 7 % in 2008 to 14 % today. crisis management – including for greece – has also evolved considerably with the creation of the esm. so you can be fully confident about the resilience of the euro and of the euro area. it is not only an economic asset, it is also a political one, supported by each of the 19 governments and – which is still more important – by 68 % of euro area citizens ( and even by 70 % of french citizens and 73 % of german citizens ). moreover, monetary policy played its full part to maintain euro area cohesion. europe has clearly succeeded with monetary union, but monetary policy should not remain the only game in town. we must continue to make progress towards economic union in order to achieve more and to further join forces in the new international context. to do so, europe should seize the opportunity to move forward on three concrete steps towards economic union : the first step, as of today, is to build a “ financing and investment union ” ( fiu ) to steer abundant savings into productive investment. resources are not lacking : in the euro area, the current account surplus, which is a measure of the excess of savings over investment, stands at more than 3 % of gdp. this trend is often described as a “ saving glut ” but i believe it is more fitting to talk of an “ investment crunch ” [ slide 6 ], since we lack productive investment. the fiu would merge together the initiatives already in place : the capital markets union of course, but also the juncker investment plan – which aims, through the use of limited public guarantees,