dearth : real estate and public investment have contributed to the post - crisis decline in total investment, but what matters the most for our economy is the contraction in business investment. the imf estimates that it stands 10 % to 15 % below pre - crisis forecasts in the euro area. ii however, to fully understand the situation, we need to take a closer look at the nature of business investment. we must distinguish between investment in construction on the one hand – which in itself does not spur innovation – and investment in research and development and industrial machinery on the other, which i call “ productive investment ”. iii the matter of concern is that productive investment is insufficient : across the economy as a whole, the productive investment rate has long been lower than before 2007 in the euro area and is persistently weaker in france than in germany. this brings us to the third important feature of this investment dearth : the behaviour of businesses ( slide 6 ). since mid - 2009 it has dramatically changed : given the weakness of business investment, non - financial corporations have turned from net borrowers into net lenders. thereby they have fuelled the current account surplus in the euro area. in short, all of these realities converge : the root of the problem today in europe is the investment deficit more than the savings glut. 2. now, why has this investment dearth happened? let me briefly elaborate on the key levers of investment. the first and most important one is expected demand ( slide 7 ). the overall weakness in economic activity acts as a deterrent for most businesses. the latest biannual survey conducted by bpifrance shows that demand remains the main obstacle to investment for french small business ownersiv. this diagnosis is confirmed at the macro level by one of our staff ’ s recent working papers, which investigated a panel of 22 advanced economies : expected demand appears as the main determinant of the slowdown in business investment ( negative contribution of more than 80 % ). v the second key economic lever of investment is confidence, or to put it another way, the level of uncertainty ( 17 % ). vi if the environment is blurred, complex or unstable – especially as regards rules and norms –, businesses opt for a “ wait - and - see ” behaviour and postpone their investment decisions. so, the simplification and stabilisation of rules is an often underestimated albeit key trigger of business investment. economic levers are of the essence, but financial ones also

and legal barriers to equity financing. the fiu would promote further convergence of insolvency regimes, as well as standardised and more detailed financial information on european corporates, including smes. in this regard, advantage could be taken of the experience acquired in certain member states – in france for instance, the central bank ’ s expertise in company rating. * * to conclude, let me quote benjamin franklin who, in his essay entitled the way to wealth, gave advice that remains highly topical : “ vessels large may venture more, but little boats should keep near shore ”. in the present situation, savings are certainly closer to large vessels than to little boats. and yet, unlike large vessels, they do not take sufficient reasonable risks. our future will depend on them venturing more to help fill the investment dearth that plagues our economy. i have given you my view on the forms it can take, and i wish you fruitful debates throughout this conference. i 12 - month cumulated current account for the period ending in august 2016. source : ecb. imf weo chapter 4 ‘ private investment : what ’ s the holdup? ’, april 2015. the figures express the average percent deviation from spring 2007 forecasts. iii gfcf in machinery and equipment and intellectual property. iv rd 63 % of french small business owners mention demand as an obstacle to investment. source : bpifrance, ‘ 63 survey of the economic climate for smes ’, may 2016. v matthieu bussiere, laurent ferrara and juliana milovich : ‘ explaining the recent slump in investment : the role of expected demand and uncertainty ’, banque de france wp no. 571 – september 2015. vi ibid. vii the hurdle rate is the internal rate of return that must be cleared for a project to be approved by a company. viii ‘ savings and investment behaviour in the euro area ’, ecb occasional paper series no. 167, january 2016. note : finland, france and italy are not included in the panel. ix ibid. ii