. the countries that have succeeded are those that have developed a virtuous circle of activity, productivity and employment. if one link is missing, the reforms implemented elsewhere will not have their expected effects. we know that france has vast labour pools in market services. we also know that by their very nature, most of these jobs cannot be moved abroad. however, many obstacles still lie in the way of their development. it is too often difficult, even prohibited, in france to produce or sell services. there are a number of causes for these obstacles. first, there is a desire to protect existing activities and to ensure that the professional quality of service provided is upheld. second, regulations aim to prevent excessively harsh working conditions. all of these reasons are legitimate in themselves. but, taken together, they considerably restrict supply even though – as foreign examples have shown – demand is potentially sizeable. these restrictions also encourage the substitution of labour by capital and therefore result in growth that is both constrained and has an insufficient employment content. they are sometimes based on a notion of working rhythms that is out of step with the functioning of a modern society and technological progress. they are very costly for the economy. and, lastly, they do a disservice to those they set out to protect. the main victims are those for whom access to employment requires flexibility, adaptation, and freedom to choose working hours, i. e. primarily young people and women. a complete overhaul of all the legal and regulatory conditions governing a wide range of commercial and services activities therefore appears to be an urgent priority. lastly, in order to increase france ’ s productivity, a shift towards technology - and sciencebased activities is essential. to do so, research and development ( r & d ) efforts must be encouraged. in this respect, while the share of public r & d expenditure is comparable or even greater than that of the country ’ s main trading partners, private sector r & d investment remains well below that in germany, the united states or japan. the creation of poles of competitiveness in 2005 and the industrial innovation agency in 2006 contribute to achieving this strategic objective. these recent initiatives should be pursued in order to expand the poles of competitiveness, attract researchers and companies, and integrate smes and startups that do not benefit from the resources available under these innovation drives. in the main, these reforms are currently underway or being examined in our country. it is thus becoming possible to create lasting conditions for stronger and more employment -

rate tenders. the latter may nevertheless be useful in certain circumstances where the escb wishes to gauge market sentiment ; • finally, the communication policy of the escb could also play a role in smoothing interest rate volatility. the escb will have to publish weekly a consolidated balance sheet. it will also publish the results of its tender operations. it could equally wish to release daily aggregate data on the reserve holdings, if averaged reserve requirements are in place, and on the use of the two standing facilities, as measured in both cases at the end of the previous day. 2. 2. intraday operations : the spillover from intraday credit into overnight credit as a borderline case to ensure the smooth functioning of the target system, the national central banks will provide intraday liquidity to participants in the real - time gross settlement systems. this will be done in the form of fully collateralised intraday credit operations, in the sense that a credit extended during the day falls due before the end of the day. from a monetary policy point of view, such operations create the risk of a spillover of intraday credit into overnight credit that would undermine the control of the escb over the euro monetary base. in other words, the spillover of intraday credit into overnight credit in the books of the central bank can be viewed as a borderline case between payment systems and monetary policy issues. within the euro area, this risk will be limited as end - of - day debit positions will be automatically considered to be a request for recourse to the marginal lending facility, i. e. an escb monetary policy instrument that bears a penalty interest rate. outside the euro area, a problem arises as the rtgs systems of non - participating countries will be connected to target, whereas no central bank currently gives non - residents access to its monetary policy instruments. as a consequence, different mechanisms are being prepared in order to prevent intraday credit, if granted to non - euro area ncbs, from spilling over into overnight credit. these mechanisms include the limitation, possibly to zero, of the amount of intraday liquidity non - euro area ncbs could receive, a system of penalties and sanctions applied in case of overnight overdrafts and an early closing time for participants in rtgs systems in non - euro area countries. the decision on which mechanisms to implement will be taken by the ecb. 2. 3. foreign exchange operations foreign exchange operations include foreign reserve assets management on the