, it included, on an exceptional basis and solely for greece, a voluntary contribution of the private sector to write down the country ’ s debt and enable it to recover ; – lastly, it considerably bolstered the efsf ’ s scope of action. it is important to realise that this constitutes major progress, in particular from the point of view of european integration. no one would have imagined that this would have been possible a few years ago. however, it was not enough to contain the crisis. as of last august, against the backdrop of expectations of slower growth, financial market tensions increased again. a vicious circle developed between the risk of a greek default, uncertainties surrounding the debt of other euro area countries and their banking sectors. in other words, as sovereign debt had previously been considered a risk - free asset, banks purchased massive amounts of government bonds. this was especially the case in europe due to the interdependence of the economies and the free movement of capital. for instance, german and french banks have a relatively large exposure to greek, italian and spanish debt. the fear of a credit default by these countries therefore constitutes a risk of very heavy losses for banks. since this would ultimately affect the public finances of the states if it materialised, it in turn increases concerns about the fiscal soundness of these countries, creating a vicious circle. so you can see that much of this mechanism is not entirely rational. only the greek debt situation is truly critical, while all the other countries have solemnly undertaken to repay their debts in full and they are in a position to do so. moreover, i have regularly given the exact facts and figures concerning our banks ’ exposures bis central bankers ’ speeches and their ability to deal with extreme scenarios. but once this mechanism is set in train, it is hard to stop it. a little over two weeks ago, a european summit offered even more far - reaching solutions to calm the crisis : the efsf ’ s capacity was doubled, banks ’ capital is to be bolstered more rapidly than planned and greece ’ s creditors have accepted a 50 % debt writedowns ( compared with the 21 % agreed on 21 july ). i firmly believe that these are the right solutions. with this debt relief and the loans offered by the efsf, greece can achieve debt sustainability. i am sure that it will manage to do so if the agreements are fully implemented and if it meets its commitments in the areas of tax collection, structural reforms and

privatisation. these efforts are obviously painful and require public support, but they are the only way for greece to get back on its feet. dealing with the underlying problems in addition to tackling the urgent issues stemming from the successive crises, it has been absolutely necessary for each country to implement all the efforts needed to restore them to a sound fiscal path. from my point of view, all countries have taken their responsibilities to do so. their credibility is now at stake and they must be committed to bringing their public finances back into balance as soon as possible. moreover, the euro area has considerably enhanced its fiscal discipline framework : national budgets have become subject to european commission monitoring, sanctions are more automatic, and early warning mechanism more appropriate. a new framework for surveillance of macroeconomic imbalances and competitiveness developments has also been put in place. i now wish to recall two points. first, excessive public debt is not solely a european problem. the sovereign credit rating of the united states was downgraded last summer and its fiscal policy framework does not appear to be much more simple or rapid than that of the euro area. second, in aggregate terms, the euro area ’ s government deficit is one of the “ least bad ” of developed countries. it is expected to stand at around 4. 5 % at end - 2011 whereas those of the united states and the united kingdom are double for example. naturally, this is not a reason to slow down reforms, quite the opposite. but it shows that our situation is not as bleak as some market developments might suggest. measures taken by the g20 in response to the crisis we have seen that there is a close link between the us episode that started in 2007 and the european episode. this clearly shows that the different regions of the world are facing common challenges and that the solutions must be shared. to this end, the g20 has grown in prominence since 2008, and has already made significant changes. the french presidency of the g20 came to an end with the cannes summit in early november. as you may have noticed, the greek situation grabbed the limelight meaning that the major advances made this year may not have received all the consideration they deserved. i would therefore like to finish my talk by recalling some of these advances : – first, the g20, the fsb and the basel committee, continued their work on the reform of the international financial regulatory system underway since 2009, in particular regarding systemically important institutions ; – second, the g20 finished its