related to energy prices : core inflation was 1 % in the same month. oil prices seem to have bottomed out and this should help inflation return to positive territory over the course of 2016, thereby lowering real interest rates and making monetary policy more effective. [ slide 4 ] the new 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 new series of targeted refinancing operations ( dubbed “ tltro 2 ” ) should improve medium - term funding conditions for banks and foster bank lending to companies and households. insee : indicateur de climat des affaires et de retournement conjoncturel. bis central bankers ’ speeches 3 / structural policies moreover, monetary policy is not the only game in town. it is supported by structural reforms that increase potential growth, particularly in countries with a high unemployment rate. history has shown that ambitious reforms can contribute durably to growth. sweden in the 1990s and germany a decade later have demonstrated that structural reforms enhance employment rates, potential growth and resilience. they also reduce labour market duality, and provide more opportunities to new entrants in the labour market, particularly young people. in the wake of a severe crisis, sweden and germany rebuilt their economic models and, as a result, have been better able to weather the latest downturn. indeed, a number of european countries are conducting major reforms to bring high and sustainable growth back. those reforms are particularly challenging when it comes to the labour market, but they are needed. we need to improve labour flexibility and reduce the duality in the labour market between permanent and temporary contracts, which generates both high structural unemployment and inequality. the most emblematic example is spanish reforms. their results are impressive, especially when we consider the very difficult economic situation in the country during their implementation. since the beginning of 2013, spain has experienced a decrease in its unemployment rate of some 6 percentage points and spanish growth is nowadays one of the main drivers of the european recovery. contrary to preconceptions, france has also demonstrated in the past its capacity to meet the challenge of economic and social reform. in the 1990s, to prepare for the introduction of the euro, france pursued a competitive disinflation policy that proved highly effective. remember that in the late 1990s, france experienced the highest gdp growth and the weakest inflation rate among european countries, along

with a significant fall in its unemployment rate. today, french reforms are heading in the right direction, [ slide 5 ] in particular the tax credit for competitiveness and investment ( cice ) and the responsibility and solidarity pact ( rsp ) that enhance the competitive strength of the french economy. a policy of administrative simplification, the so - called ‘ simplification shock ’, and a new law to sustain economic growth and entrepreneurship ( ‘ loi macron ’ ), are also being conducted in order to rebuild business confidence. however, we are not there yet and a number of reforms need to be complemented. in particular, in the labour market : hopefully renewed progress will be made with the draft law under discussion in parliament. finally, in the euro area, fiscal policy is now more balanced since significant adjustment has already been achieved. structural efforts and a growth recovery have led to a reduction in deficits and to a stabilisation in the ratio of debt to gdp. this more balanced policy mix is an opportunity to engage in new ways of thinking and to strengthen the recovery via stronger economic coordination in europe. the room for manoeuvre in economic policy is highly heterogeneous across european countries, and each country should use its capacity to improve the overall situation [ slide 6 ]. european countries have done quite a lot on their own, but now we can and must do more to coordinate demandside policies and structural reforms at the european level. to do so, i would like to make two proposals. 4 / strengthen investment first, we need to improve investment financing [ slide 7 ]. our efforts should be put towards financing growth and innovation and towards finding the right mix between debt and equity financing solutions, while still preserving financial stability and consumer protection. in the eu, the european commission has launched several initiatives to serve these objectives, particularly the investment plan and the capital markets union. bis central bankers ’ speeches second, we need to focus on removing obstacles to investment, providing visibility and technical assistance to investment projects and making smarter use of new and existing financial resources. the european fund for strategic investments ( efsi ) drives the investment plan for europe. it supports strategic investments in key areas such as infrastructure, education, research, innovation, as well as risk finance for small businesses. through the use of limited public guarantees, it aims to foster private investments totalling eur 315 billion in three years. for the first year, the plan managed to trigger around eur 76 billion of