s update of the stability programme published this week rightly provides for such a control of public expenditure once the recovery is firmly established ( 0. 7 % growth per year from 2023 on average ), although this is somewhat higher than 0. 5 % per year, and incorporates a more optimistic view on potential growth than our own forecast ( 1. 35 % vs. 1. 1 % ). what is more important in this regard however is not the exact number but that the established targets are effectively met. the level to be fixed – and then respected –, is a matter for democratic debate, not for central banks. this is a demanding but attainable goal : many of our european neighbours have achieved it. * * in conclusion, the covid crisis has completely warranted a very supportive fiscal policy. but the gradual exit from this crisis should be a crucial opportunity for us europeans to respond to one core question : how to maintain the right use of the fiscal tool while ensuring the sustainability of our debt, in order to be able to finance our common social model for coming generations. accommodative monetary policy obviously helps, but it cannot be taken for granted eternally. to draw an analogy from the sphere of climate change, we should avoid a « tragedy on the horizon ». thomas paine, an english - born political philosopher and citizen of the world, once said : “ if there must be trouble, let it be in my day that my child may have peace. iii ” this is exactly what we should aim at in the next decade. thank you for your attention. les notes du conseil d ’ analyse economique, pour une refonte du cadre budgetaire europeen, avril 2021 abiad a., furceri d., topalova p., the macroeconomic effects of public investment : evidence from advanced economies, imf working paper, may 2015. iii the american crisis ( circa 1776 ) i ii

to give any credibility to a scenario that we consider unacceptable. however, there was full, total, and transparent disclosure of exposures to sovereigns for each in individual bank. everybody is free bis central bankers ’ speeches to make their own assumptions and calculations. with knowledge of the exposure, it does not take a rocket scientist to figure out some scenarios. it turns out that such calculations would produce very reassuring numbers. but, for some reasons, they never were publically made by most analysts. just as an illustration, the total exposure of french banks to sovereign debt in the southern part of europe is 38 % of total tier one ( 13 % without italy ). i ’ ll let you make your own conclusions. even in an apocalyptic scenario, only a small fraction of french banks tier one ratio would be compromised. the same results apply, with some variations, to other countries. conclusion let me know conclude. like all other major advanced economies, the euro area is facing big challenges in adjusting to the post - crisis environment. for all, those challenges relate to long term fiscal sustainability. they are neither bigger nor smaller for the euro area than for the us, uk or japan. they may be more complicated to solve because, by nature, our governance is more complex and we face specific collective action problems. it may take us longer to deal with difficulties as they appear, and we are paying a price for this relative inertia. but problems are being tackled, reforms are being implemented and i am convinced that, at the end, the euro area will emerge as a stronger and more robust entity than before the crisis. as for the european system of central banks, i can assure you that we stand ready to act as forcefully as necessary to ensure price stability and preserve the integrity of the euro, which is, today, our most precious common good. bis central bankers ’ speeches