assume that wage moderation in the euro area will continue and that the pressure of demand on prices will remain limited, although there is some cause for concern about forthcoming wage negotiations. it is therefore particularly important to point to the indispensable role of continued wage moderation in fostering employment and maintaining a favourable outlook for price stability. finally, i should also emphasise that we do not regard recent monetary developments as posing a risk to price stability. although the annual growth rates of m3 have picked up significantly in recent months, we need to keep in mind that this happened in an economic and financial environment characterised by exceptionally high uncertainty throughout the world. it can therefore be assumed that this growth to a large extent reflects the risk aversion of investors who wish to " wait and see " – and therefore hold liquid and safe assets included in m3 – before again undertaking long - term investments. in this sense, this increase in m3 should remain temporary and should not indicate future inflationary pressures. this notwithstanding, the continued acceleration of m3 and the ongoing build - up of liquidity calls for close attention and will require a thorough analysis of monetary developments in the months to come. overall, we do not currently see any major risks to price stability in the euro area. in fact, following a series of unexpected sectoral price shocks, the outlook for price stability significantly improved in the course of 2001. the governing council reacted to this in a forward - looking manner by reducing the key ecb interest rates by a total of 150 basis points in 2001. on the basis of current information, our assessment is that annual inflation rates should fall safely below 2 % this year and thereafter remain at levels consistent with price stability over the foreseeable future. against this background, the governing council of the ecb concluded at its last meeting that it considers the current level of key ecb interest rates to be consistent with the maintenance of price stability over the medium term. the best contribution monetary policy can make to sustainable and non - inflationary economic growth is to maintain price stability. in this respect, i would also like to reiterate how important it is for fiscal policies to maintain a medium - term orientation within the framework of the stability and growth pact. we are well aware that the current weakness in economic growth presents a particular challenge for those countries which have not yet attained budgetary positions close to balance or in surplus or which have high public debt - to - gdp ratios. nonetheless, it is important to realise that, rather than

also applies to france, incidentally. 2 / 3 bis central bankers'speeches and the convergence you ’ re talking of – what does it mean for france? french growth is now picking up but it remains lower than that of germany and the euro area, so the reforms in france have to continue in order to consolidate growth. and that will allow france ’ s voice to be heard in the euro area. what are these reforms? i am not going to enter into a debate which is now an election debate. the reforms are... is it necessary to copy what germany has been doing for a decade, wage moderation alongside a more flexible labour market? yes, there is a need for a labour market which works in a more flexible way, but there must also be productivity, innovation and education enhancement policies, notably in higher education, to ensure that france remains at the forefront of innovation. and germany, for its part, must it also make efforts? yes, germany has implemented major reforms in the past from which it benefits today, but its demographic prospects are more difficult than those of france, so it too must continue with reforms, and in particular it must invest. last question, on the budget deficit. should europe be more tolerant of the sacrosanct 3 % objective? i don ’ t believe that this is an issue that concerns europe. indeed, france has been above 3 % for many years now, so it clearly shows that the problem doesn ’ t lie so much with europe, and it shows that there hasn ’ t really been austerity in france. france today, in 2017, is on the threshold of being able to pass below 3 %. do you think it will achieve that? france can achieve it. it will depend on the new government ’ s policies. i think it is important that france achieves it. i ’ m concerned, by the way, by the declarations of various candidates, on both left and right – this is not a question of politics – which envisage bouncing back, returning, to above3 %. what does that mean? it means that france ’ s public debt will continue to grow and i, as a french taxpayer ( because i am also a french taxpayer ), do not want france ’ s debt to rise to 120 % or 130 % of gdp. 3 / 3 bis central bankers'speeches