##e both public and private investment in order to take advantage of the exceptional financing conditions created by our monetary policy. to do so, we need to put the juncker plan back on the table. the juncker plan has yielded results, but they are insufficient. to support the revival of this plan, i have proposed the creation of a true european “ financing and investment union ”. to achieve this, we must combine the juncker plan, the european commission ’ s plan for a capital markets union, and the banking union. the aim is to create synergies in order to achieve three ambitious goals : better channel euro area household savings to productive investment and equity ; better pool risks across countries ; and thus better finance innovation and the networks our economy needs. this is the direction we should take now. lastly, we need to make progress towards an economic governance of the euro area ; in france, we spoke of “ economic government ”. this progress is essential, regardless of whether or not the united kingdom remains in the european union ; naturally, i would like it to stay in. this is not a purely institutional question ; it is not about “ more brussels ” but very concretely about more growth and employment. indeed, economists estimate that the current lack of coordination of national economic policies has cost europeans between two and five percentage points of gdp since 2011. naturally, contrary to the case of monetary policy, the aim is not to fully integrate all of our economic policies at the european level, but to achieve a “ full coordination ” of fiscal and structural policies. for this, we need to have shared economic goals, and a true “ collective strategy ” for the euro area, in which each country has a role to play to improve everyone ’ s situation. this requires trust, in particular between france and germany, based on a clear pact : national reforms and ( not or ) european coordination. this full coordination also rests on the setting up of a strong and legitimate european institution : a euro area finance minister backed by a european treasury system and subject to greater democratic accountability. this finance minister would be charged with defining the collective strategy, supervising its decentralised implementation by member states and managing crisis management tools. going forward, he / she could also be in charge of a common budget. for the euro area and for the confidence of its citizens, 2016 – 2017 is the crucial time to act : i had the opportunity to discuss these proposals in greater depth a few days ago, and i hope that our exchange will

domestique. le role de la structure des echanges ». first, a natural process of real appreciation of currencies in catching - up economies is taking place, leading to upward pressures on the prices of their imports. along with the catching - up in terms of standard of living, the level of prices in emerging countries tends to converge to the level of advanced countries through a combination of appreciating currency and higher inflation. although somewhat hampered by exchange rate policies in the past decade, it seems to gather speed now with, as an example, the most needed faster appreciation of the renmibi and at the same time accelerating inflation in china. this process will affect import prices of manufactured goods in developed economies. second, the growth of emerging market economies and the rise in the living standards of their populations are also leading to a surge in the demand for natural resources, food and energy, which logically has a strong and permanent impact on inflation. furthermore, by strengthening the magnitude of global shocks in relation to more specifically domestic shocks and favouring the international transmission of the latter, globalisation introduces a much greater synchronisation of inflationary cycles between countries, with the ensuing risks of amplification. overall, the effects of globalisation have ceased – probably in the long term – to be spontaneously disinflationary. other factors will add to the inflationary pressures in the medium to long run. without elaborating too long on them today, i want to mention in particular population ageing and climate change. the ageing of the population will lead to a significant increase in public spending, for retirement pensions and health expenditure. at the same time, the growth in public indebtedness during the past twenty years will require an adjustment at some point. both issues will lead to a mix of economic policy decisions and there may be a conflict between firms and employees about the final burden sharing, with risks of a wage - inflation spiral. climate change could also have both a direct impact on prices, through disruptions in production, and an indirect impact, through policy measures to curb down carbon dioxide emissions. climate change, through unusual weather outcome – temperature, rain or unusual seasonality – or disasters, would disturb climate sensitive productions such as food products or electricity ( e. g. hydroelectric energy ). scarcity of these products would then lead to temporary overshooting in their prices. measures to curb down carbon dioxide emissions will have a direct impact on prices through increases of