. this interdependence is not only commercial, it is more generally macroeconomic. econometric work has indeed shown that french and german gdps are closely correlated. this means that national economic policies cannot deviate excessively from each other. these foundations progressively convinced france and germany that they needed a common monetary destiny as i said earlier, the collapse of the bretton woods system led european governements to organize monetary relations between each other. france and germany were among the most prominent actors in this strategy. i personally see two main elements in this common destiny : the creation of the european monetary system ( ems ) in 1979 and the emergence of a conceptual convergence between our two countries as regards monetary issues. the creation of the european monetary system in march 1979 highlights best the cooperation between france and germany. the ems not only provided exchange rate stability through the setting - up of formal fluctuation bands between currencies ; it also organized a monetary solidarity between countries, by providing compulsory interventions and related financing facilities. although the very first years of the ems were characterized by several currency realignments, due to insufficient nominal convergence between countries, the system progressively contributed to exchange rate stability. german monetary policy, based on stability and credibility, proved to be efficient. in this context, the french authorities fully endorsed the objectives and disciplines of the ems and embarked on monetary and exchange rate stability. the years that followed were characterized by increasing convergence between countries and fewer realignments. all countries, including new participants in the system, adopted similar strategies. although satisfactory in theory, this stance was nevertheless difficult to follow for some economies still facing imbalances, and in particular a lack of competitiveness. this explains partly the crises that occurred in 1992 and 1993. i cannot forget how efficient franco - german cooperation was during this difficult period. this concrete cooperation has also been made possible by the emergence of a conceptual convergence as regards monetary issues. since 1987, the central rate of the french franc within the european exchange rate mechanism ( erm ) has been unchanged, and a virtuous disinflation process has been taking place. this policy has allowed french short - term and long - term interest rates to decline steadily and to stand at similar levels to those reached by the best performers within the ems. and a consensus has emerged in france that monetary policy should be shielded from short - term influences and short - termist strategies and placed in the framework of a medium and long - term strategy of credibility.

to ensure fiscal discipline. in other words, in the famous rules / discretion debate, we need indeed more discretion - but not too much ; and we need less mechanical or obscure rules, but we still need rules. the set - up should indeed ensure binding thresholds for the minimal annual adjustment of public finances. let me add that the more we progress effectively on national fiscal discipline, the easier we could envisage a common fiscal capacity – which we badly need. mario draghi eloquently advocated it recently, v and i wish it will be part of his new mission on competitiveness in europe. to conclude, let me borrow a fundamental principle from physics, stated by isaac newton : " when two forces unite, their efficiency double ". well, it is time to combine the two forces of our monetary and fiscal policy, towards a greater efficiency of our euro area economy and to the benefit of our citizens. thank you for your attention. i press release : governors and heads of supervision endorse initiatives in response to the banking turmoil and reaffirm priority to implement basel iii. ii eurogroup statement on the euro area fiscal stance for 2024, press release, 13 july 2023. iii c. bouthevillain, s. debu, towards a much - needed reform of eu fiscal rules : the european commission's proposals, banque de france bulletin no. 246 : article 2, 21 june 2023.. iv x. debrun, l. jonung, under threat : rules - based fiscal policy and how to preserve it, european journal of political economy. v the economist, mario draghi on the path to fiscal union in the euro zone, 6 september 2023. 3 / 3 bis - central bankers'speeches