unit ( base 100 in 1987 ). a fall in the indicator means lower costs and thus better competitiveness. this remarkable trend in our production costs - made possible by long - run low inflation - is a major achievement of the cross - party economic and monetary strategy pursued by the french government and central bank over a long period. it is important for france and the euro area to maintain and consolidate this strong cost - competitiveness position. since the introduction of the single currency, it is more important than ever that we very closely monitor the indicator for unit production costs as it determines the competitiveness of the goods manufactured in our economy and therefore the current level of employment. this indicator also determines future employment because it dictates the attractiveness of an investment in our economy compared to elsewhere, particularly outside the euro area. allow me to lastly make a general remark about our strategic approach to growth. under the notable influence of new information and communication technologies, a change is underway in the overall attitude of europeans in general and french people in particular concerning the motors of economic growth and job creation. persistent mass unemployment, the structural causes of which were poorly understood, had for a long time led to the adoption of certain malthusian attitudes : wariness towards technical progress as it could potentially destroy jobs, the avoidance of productivity - enhancing investments thought to contribute to higher unemployment and, lastly, efforts to reduce the available work force with a view to sharing the same number of jobs between a smaller number of people. having thus sought to limit technical progress, the available work force and the capital stock, it is not surprising that, despite the considerable progress in recent years, europe and france have seen that their non - inflationary growth potential was still not as high as would have been desirable. in europe and in france, we are seeing a profound change in perspective and are moving away from malthusian attitudes. the banque de france and the entire eurosystem can be counted upon to support this change. this is why the monetary policy council continues to make the following recommendations : in the interest of currency and price stability and therefore of robust growth, sustainable because it is non - inflationary and effective in combating unemployment, it is now more than ever the time to : – invest and ease the constraints on capital. investment is essential in our economy, in which the capacity utilisation rate currently stands at about 87 % and 31 % of firms are experiencing production bottlenecks. an increase in the capital stock is necessary to

be relatively limited. second, i think the framework we have set, results in something very different from what we had before. having decided that we refinance at fixed rates for unlimited quantities, and with a large corridor between the deposit facility and lending rate means, the lending rate has become the ceiling and the deposit facility rate is the floor and markets tend to move the money market rates in between, with overnight rates at a very low level and the three month rate at a level which can be below the refinancing rate. as a consequence, the rates effectively paid by borrowers are much closer to the situation in the us or the uk than most people would imagine. ft : what does that mean in practice? that the main policy rate need not go any lower, or can ’ t go any lower? cn : i didn ’ t say that. ft : or that the deposit facility rate can ’ t go any lower? cn : i didn ’ t say that either. but it is clear that the room for manoeuvre on the deposit facility is limited. what i mean is that if we keep the present framework, we cannot move much. that ’ s obvious. if we want to move more, we have to change the framework, which could cause inconvenience. ft : so there is not much room for manoeuvre and very soon you are going to have to think about other non - standard measures? cn : if we feel we need more … we are in a process where three month rates lose a few basis points every day. market and lending rates are continuing to move nicely downwards. the process has been fuelled by the 275 basis points cut that the ecb has decided. the process is not finished. we need some time for all that to feed through into the economy. ft : so no rate cut in april? cn : we will see. we have proved that we were always ready to act when we felt it was necessary. but we act on the basis of facts and figures, not only macro - economic facts and forecasts, but also on the actual developments in the financial markets. ft : do this week ’ s french industrial production figures means things in france are going to get a lot worse than expected by the banque de france and the government? cn : the figures were bad and i must say that they probably makes our own forecast of a decline of growth of 0. 6 per cent during the first quarter maybe a little