out a loan to start a business or to buy consumer goods. has it damaged growth and the battle against unemployment? the euro has acted as an economic shock absorber – and i would add that france has weathered the financial crisis very well – but it has also revealed the strengths and weaknesses of each economy. in 1999 the unemployment rate was higher in germany than it was in france. now it ’ s the other way around. yet the two countries have had the same currency for18 years. the unemployment rate has nothing to do with the euro, it is linked to the success or failure of employment policies. the famous maastricht criteria are often referred to as a brake on the economy and job creation. is the famous 3 % deficit limit still of interest today? 1 / 3 bis central bankers'speeches the question the french ought to be asking is : would increasing public debt that is close to 100 % of gdp create more economic activity? i don ’ t believe it would. it is difficult to explain that the 3 % deficit is a straightjacket when france has not respected the criterion once since 2007. in your view, what would happen if france exited the euro, as the front national is proposing? that ’ s not a scenario i want to contemplate as it ’ s not what the french want. when asked if they think the euro is a good thing, the answer is an unambiguous “ yes ”. according to the eurobarometer, a survey carried out twice a year for the european commission, public support for the euro last december was 70 % in the euro area and 68 % in france. but if you do pursue that thought, leaving the euro would mean taking risks which have unpredictable consequences. what are they? leaving the euro would threaten savings and jobs in france. it would certainly lead to a rise in interest rates. debts incurred by french businesses and households would increase. inflation, which would no longer be restrained by the ecb, would eat into savings, the fixed incomes of households and small pensions. it would be to choose impoverishment. does the euro have a future? yes, of course, the euro has a future. but the euro area has to undertake reforms. more coordination between governments, more reforms at national level, more solidarity and perhaps a kind of common euro area budget are necessary. in other words, a greater sense of the responsibility which comes with belonging to the single currency. the imf is calling for a loosening

decisions, policy - makers must make every effort to diagnose the state of the economy and seriously evaluate all risks ahead. only then should they draw up a carefully considered prescription. references altissimo, filippo, ehrmann, michael, and smets, frank ( 2006 ), “ inflation persistence and price - setting behaviour in the euro area – a summary of the ipn evidence ”, ecb occasional papers series no. 46, june 2006. see jarocinski and smets ( 2008 ). see for example taylor ( 2007 ) and eickmeier and hofmann ( 2009 ). atkins, ralph, and barber, lionel ( 2007 ), “ under fire, on target ”, on the financial times, 18 may 2007, page 9. barro, robert j., and gordon, david ( 1983a ), “ a positive theory of monetary policy in a natural rate model ”, journal of political economy, 91 ( 4 ), 589 - 610. barro, robert j., and gordon, david ( 1983b ), “ rules, discretion, and reputation in a model of monetary policy ”, journal of monetary economics, 12 ( 1 ), 101 - 121. batini, nicoletta, and nelson, edward ( 2001 ), “ the lag from monetary policy actions to inflation : friedman revisited ”, international finance, 4 ( 3 ), 381 - 400. bernanke, benjamin, reinhart, vincent., and sack, brian ( 2004 ), “ monetary policy alternatives at the zero bound : an empirical assessment ”, finance and economics discussion series 2004 - 48, federal reserve board. blanchard, olivier, and giavazzi, francesco ( 2005 ), “ credibility does not require dogmatism – only clarity of purpose ”, at : http : / / www. voxeu. eu / blinder, alan ( 1998 ), central banking in theory and practice, cambridge, the mit press. blinder, alan s., ehrmann, michael, de haan, jakob, fratzscher, marcel, and jansen, davidjan ( 2008 ), “ central bank communication and monetary policy : a survey of theory and evidence ”, journal of economic literature, 46 ( 4 ), 910 - 945. boivin, jean, and giannoni, marc ( 2006 ), “ has monetary policy become more effective? ”, review of economics and statistics, 88 ( 3 ),