eu - wide central fiscal capacity of a meaningful size can help ensure resources flow to where they have the highest benefits, and not where governments are more able and willing to provide state aid. ” national governments must avoid creating competitive advantages over other eu countries. we should rather channel our forces towards a truly european industrial policy, supported among others by public - private partnerships, and increase investments in cross - border infrastructure. to achieve this, european competition policy needs to be more strategically oriented. we should in particular aim for a digital single market combining regulation, financing and talent development. b ) a financing union page 8 sur 10 conventional wisdom states that the three transformations mentioned previously are desirable but impossible to finance. i would like to refute this idea. the climate transition will be by far the most capital intensive. the amounts involved may look daunting, especially when presented in absolute terms : possibly around 620 billion euros per year of additional investments in the eu through 2030, according to the european commission ’ s latest estimates. xiii this represents up to 3. 9 % of eu gdp, which the public sector can only partially finance due to the high level of public debt. in this regard europe needs a common stability framework to recover some leeway, with new fiscal rules hoped for in the very next days : let me stress that we need rules, remaining at once pragmatic and not too complex. the climate transition can be financed, subject to a key prerequisite : that the private sector shoulders the bulk of the financial effort, and that we unlock crossborder capital flows for the transition. this is the strongest argument in favour of a green capital markets union ( cmu ), which i also advocated as early as 2019 with jens weidmann xiv, and more recently with joachim nagel xv. but why don ’ t we make more progress? i fully concur with ecb president christine lagarde that europe should make a “ kantian shift ” in our approach to cmu xvi. as she strongly stressed, immanuel kant boldly stated that, instead of the world creating our perception, it is our perception – and our will – that defines how we experience the world. translated to cmu : let us go beyond the rather technical and bottom - up details of the current action plan, and dare a great political ambition “ from the top ”. a higher purpose – financing the green and digital transitions – would facilitate much greater ownership and favour faster implementation. the digital transformation will

francois villeroy de galhau : monetary and fiscal policy - mix addressing the disease of inflation speech by mr francois villeroy de galhau, governor of the bank of france, at the eurofi financial forum 2023, santiago de compostela, 15 september 2023. * * * ladies and gentlemen, it is a great pleasure to be here for this final day of the traditional september eurofi meeting, and i extend my warmest thanks to didier cahen and david wright for organising this event, this time in the holy city of santiago de compostela. let me start with good news about a favourite eurofi topic : banking regulation and basel 3. i say it as bis chair and former chair of ghos : we had in monday an important ghos meeting in basel, and we unanimously welcomed the decisive progress made this year in the implementation of basel 3. by 2025, all jurisdictions – including europe and – yes – the us – should have implemented it in a broad compliance with the standards. i know each banking industry, on both sides of the atlantic, tends to consider that the other side has undue advantages. it's simply not right, and our motto is now straightforward : let us now close this page, and implement the european compromise, no less and no more. no less as some banks would perhaps still dream of, and no more as some theoreticians of regulation would perhaps imagine. and we should now turn to the priority learned from the banking turmoil : " strengthening supervisory effectiveness " i rather than focusing on further regulation. let me now turn to my theme which is the policy mix to fight our main economic disease : inflation. well, santiago has not yet produced a miracle for inflation, but there is indeed some encouraging news : headline inflation has passed its peak since the beginning of 2023, and it seems that core inflation is following suit. indeed, the latter started to recede, to stand at 5. 3 % in august ( down from 5. 5 % in july and 5. 7 % in march ) in the euro area. obviously, these inflation rates remain too high : we must and we will bring inflation back towards our 2 % target by 2025. i reiterate this morning this clear commitment which is fully consistent with our latest ecb forecasts. monetary policy is the first line of defence, and the main remedy for this disease. i won't make comments about yesterday's governing council and monetary decision