economy day 2019 volksbanken raiffeisenbanken – frankfurt, 14 november the future of the european economic and monetary union speech by francois villeroy de galhau, governor of the banque de france press contact : mark deen ( mark. deen @ banque - france. fr ; 06 88 56 54 03 ). page 1 sur 7 ladies and gentlemen, i am very pleased to be here with you and wish to thank you for your invitation. it ’ s almost like a home from home for me here : i visit frankfurt at least twice a month for ecb governing council meetings! i should add that i myself worked as a retail banker for 12 years. today i am also speaking to you as a committed european and a friend of germany. i am french but my family roots are in saarland. my family has lived there since the end of the 18th century and its ceramics company, villeroy & boch, is part of the german “ mittelstand ”. i love germany, its language and its culture. the impressive number of participants in today ’ s event is testament to the vitality of the volksbanken raiffeisenbanken. through their ideas, friedrich wilhelm raiffeisen and hermann schulze - delitzsch [ founder of the volksbanken ] influenced many cooperative banking initiatives in europe and throughout the world. the cooperative model has proved its resilience, first and foremost because it inspires confidence over the long term. these two core values of confidence and stability are also what characterise our single currency, the euro. this year it celebrated its 20th birthday. however, to optimise its benefits objectively, we need to overcome four cliches. i shall then turn to your banking industry and its three key challenges for tomorrow. * * i. overcoming four cliches in order to optimise the euro area. i am fully aware of the criticisms and debates that exist here in germany about the functioning of the euro area. not everything is perfect ; but germany can be proud of having helped to create an internationally recognised currency inspired by its own core values : independence, respect for treaties, price stability and a long - term approach. the ecb and the euro are the true descendants of the bundesbank and deutsche mark. but today, if we want to move forward with a serene debate, we need to get rid of four cliches. page 2 sur 7 the first one that

in this regard, i would like to applaud the open approach of the federal minister of finance olaf scholz. beyond the debate on deposit guarantees, which in my opinion calls for a pragmatic compromise rather than a political confrontation, his merits are threefold : first, advocating european financial sovereignty after brexit ; this requires adding a stronger banking union and a capital markets union. second, proposing a common bank liquidation procedure, in order to deal more rapidly and effectively with failing banks. finally, overcoming the blockages of “ host countries ” of subsidiaries, in order to facilitate the constitution of european cross - border banking groups, including when the parent company is german. of course, many things still need to be negotiated, notably the necessary reduction of risks. but the scholz proposals are putting back in motion this key issue for the solidity of the euro area and the smooth financing of investment. of course, there exists a diverse range of consolidation models across europe, and in this movement, small banks must not relinquish their values. in this respect, your central body dz bank seems to me to be a good example of a grouping which ensures a geographical and functional complementarity of activities. i welcome the current debates on how to consolidate networks of cooperative and mutual banks in europe ; the german sector has the means of significantly contributing to these debates. page 7 sur 7 * * thanks to you, i have discovered raiffeisen ’ s beautiful phrase : " several persons have the ability to do what is impossible for one individual. ” iv this phrase perfectly describes the ambition of mutual banks. but it is also, i believe, a model of thought for europe. in this uncertain world, shaken by the rivalry between the united states and china, germany and france must, more than ever, overcome their differences. the entry into office of the new european commission, around ursula von der leyen, must be an opportunity to move forward together. it's now, or never. europeans expect no less. thank you for your attention. references : i “ shock resistant ”, france ’ s attractiveness survey, ey, june 2019. ii laurent abraham, jean - baptiste gosse, “ the euro : is the grass always greener on the other side? ”, banque de france blog, may 2019. iii eba source and sample. iv " was dem einzelnen nicht moglich ist, das vermogen viele. "