often underestimated link between reform and the changeover to the euro : indeed, the introduction of banknotes and coins in euro is a major structural reform in itself, as it constitutes a powerful drive towards restructuring the european economy, and a strong lever to facilitate the comparison of prices, taxes and incomes between the member states. in my view, three other major prerequisites are needed in order to foster robust, sustainable growth and durable job creation, namely : the continuation and strengthening of a policy designed to keep in check unit production costs, the improvement of the competitiveness of the economy, through ambitious structural reforms and lastly, the completion of a fully integrated european capital market. raising the potential output growth and enhancing the competitiveness of the economy : if europe wants to secure sustainable growth at levels that are as high as possible, the key variable is potential output growth. the level of potential output growth can firstly be raised thanks to investment : business leaders are completely free to invest wherever they want in europe or elsewhere in the world. it is thus important that we create economic, legal and fiscal conditions that are as favourable as possible to investment in europe. the investment appeal of europe is crucial in this respect : the more we invest, the fewer inflationary pressures we will have, and the stronger potential output growth will be. another way of raising potential output growth is to increase the quantity of available labour and to boost gains in labour productivity : the fast transformation of information systems is likely to accentuate the structural transformation of the economies. since last year, the evolution of stock exchanges has shown that the euphoria associated with the concept of a totally new economic era has vanished, but what remains true is that a remarkable potential of economic changes remains for the future. it may help to boost labour productivity significantly on a recurring basis, and, in so doing, to boost production while preserving the economy ’ s competitive edge. that strategy should be pursued whilst increasing the overall competitiveness of europe ’ s economy. if i refer to what we observed in the past, the french economic strategy, based on a moderation in the increase of unit costs of production, gave us an important advantage : the considerable improvement in the cost competitiveness of the french industrial sector from the mid - 1980s has contributed extensively to the growth of our economy. the french economy grew faster than the other major euro area economies in recent years, while repeatedly recording a large current account surplus. this was largely because, from early 1987, production costs,

] to wrap up the first part of my talk, three elements may weaken adjustments of current account imbalances [ slide 11 ]. the first is the rise of services trade, which is less elastic to relative prices than trade in goods. second, there is the rise in stock positions, which results in income flows being an increasingly important determinant of current account balances, with substantial inertia in relation to legacy assets and debts. finally, the dominant currency paradigm means that expenditure - switching channels may be muted and slow down external adjustments. [ slide 11 : policy implications : impact on external adjustment ] recent shocks to current accounts : covid - 19, and russia ’ s invasion of ukraine in recent years, the global economy has experienced a series of important shocks, among which covid - 19 [ slide 13 ]. the repercussions of this pandemic have been diverse and complex. primarily, we observed a surge in china's trade surplus, in relation to the supply of medical goods. yet, the most dramatic consequence materialized in the evolution of net lending and borrowing across sectors, as for example shown in this slide for four countries. 2020 marked a distinct shift, characterized by an increase in government deficits and a simultaneous surge in net savings within the private sector. in recent years, the surge in energy prices had a significant impact, amplifying trade surpluses for exporters while weighing on importers. the key question is whether this trajectory is temporary or persistent — we will come back to this matter in the last part of this speech. [ slide 13 : covid ] another major shock in 2022 was russia's invasion of ukraine. the impact on ukraine's current account is notable, as reflected in the chart [ slide 14 ], measured as a percentage of ukrainian gdp. beyond the base effect, it is essential to acknowledge historical contexts where the influence of wars on current accounts depended on the support provided by allies. an illustration is found in france during world war i, where the trade deficit surged to 30 % of gdp in 1917, fueled by resource imports from england, north america, and its colonies. in contrast, germany sustained much smaller deficits, falling below 5 % of gdp, as it had not received lending from allies. the paradoxical increase in ukraine's current account in 2022, despite a substantial trade deficit, stems from secondary income, which mostly comprises foreign aid contributions. [ slide 14 : war, ukraine in 2022 ]