fiscal room for manoeuvre. hence, a credible growth policy will undoubtedly raise the capacity of monetary and fiscal policies to fulfil their stabilisation mandates. to conclude, i would like to encourage the emu lab to work on a broader concept of policy mix that would encapsulate not only monetary and fiscal policies, but also macroprudential policies and the dimensions of the single market that will make the euro area more resilient to a wide range of shocks, and stabilisation policies more effective. thirty - two years after the maastrichtian policy mix, let's build the florentine policy mix! i bartsch ( e. ), benassy - quere ( a. ), corsetti ( g. ) and debrun ( x. ), it's all in the mix : how monetary and fiscal policies can work or fail together, geneva report on the world economy, 15 december 2020 ii draghi ( m. ), le chomage dans la zone euro, speech, annual central bank symposium in jackson hole, 22 august 2014 iii dao ( m. ), dizioli ( a. ), jackson ( c. ), gourinchas ( p. - o. ), leigh ( d. ), unconventional fiscal policy in times of high inflation, imf working papers, september 2023 iv furceri ( d. ) et zdzienicka ( a. ), the euro area crisis : need for a supranational fiscal risk sharing mechanism?, open economies review, 26, 683 – 710, 2015. v francois villeroy de galhau, from a capital markets union to a genuine financing union for transition, speech given at eurofi, ghent, 23 february 2024 vi allen ( t. ), boullot ( m. ), dees ( s. ), de gaye ( a. ), lisack ( n. ), thubin ( c. ) and wegner ( o. ), climate transition scenarios : short - term economic effects, banque de france eco notepad, 8 december 2023 vii gautier ( e. ), grosse steffen ( c. ), marx ( m. ) and vertier ( paul ), decomposing the inflation response to weather - related disasters, banque de france working paper, december 2023 4 / 4 bis - central

occasions, the policy mix has served us pretty well, for instance in 2009 in response to financial crises, or in 2020 in response to the covid crisis. in both cases, monetary and fiscal policies were clearly counter - cyclical in the euro area. from 2014 to 2019, a few cracks appeared in the simple, maastrichtian distribution of tasks, as the eurosystem was struggling to lift the inflation rate while the aggregate 1 / 4 bis - central bankers'speeches fiscal stance in the euro area was flat. some doubts appeared as to the ability of monetary policy alone to reach the 2 % inflation target. at the zero lower bound, monetary policy had become relatively less powerful whereas fiscal policy benefited from the lack of crowding out effect, hence becoming more effective. in his speech at jackson hole, in august 2014, mario draghi explicitly called for a coordination of monetary and fiscal policy, declaring that " it would be helpful for the overall stance of policy if fiscal policy could play a greater role alongside monetary policy ". ii but the real shock to the policy mix came with the energy crisis, in 2022. following its mandate of stable inflation, the eurosystem raised its interest rates ten times between july 2022 and september 2023, with a total increase of 450 basis points. simultaneously, though, the post - covid adjustment of fiscal balances was slowed down by the introduction of costly measures to protect households and firms from a sudden and temporary rise in energy prices. some of these fiscal measures had the same goal as monetary policy, i. e. stabilising inflation. according to imf estimates, iii these measures reduced inflation by 2. 2 percentage points in 2022, at a budgetary cost of 3. 3 % of gdp in the euro area. in a new keynesian model, a standard fiscal stimulus of the same magnitude would rather lead to an increase in inflation of between 0. 3 and 1 percentage point. smoothing price increases may have helped the real economy to adjust and limited the price - wage spiral. the fact that the shock on energy prices was only temporary has validated this strategy ex post, although at a relatively high fiscal cost. this episode reminds us of the existence of cost - push shocks and the need for governments to monitor not only the output gap but also the inflation rate at the country level. jean - claude trichet was famous for brandishing graphs showing cumulated divergence of unit labour costs across the euro area. such divergence was