francois villeroy de galhau : european resilience and parisian momentum speech by mr francois villeroy de galhau, governor of the bank of france, at the paris europlace, new york, 11 april 2023. * * * ladies and gentlemen, it is a great pleasure for me to be here in new york for this paris europlace gathering, and i would like to thank damien laban, deputy consul general of france in new york, for his kind welcoming words, and emmanuel goldstein from morgan stanley. the last time i was able to attend this traditional spring event was in april 2019, on the very same day and time notre - dame de paris caught fire, and before the covid crisis struck. a lot has happened since then, including the outbreak of a war in europe, which was another major shock. however, our atlantic alliance has strengthened, europe's economy has proved remarkably resilient, and we at the european central bank will rein in inflation by end 2024 / 2025 at the latest ( i ). on another note, i must mention that paris has asserted itself as a major financial centre ( ii ). i. europe has proved remarkably resilient, and we will rein in inflation let me start with our updated economic outlook, in europe and in france. you may remember that in the quarters that followed the invasion of ukraine, growth prospects were regularly revised downwards, as our european economy suffered in particular from high energy prices, fear of a shortage in energy sources, and hence general uncertainty - and even worries about how we would get through the winter. europe reacted swiftly, diversifying its sources of energy supply, and global market prices decreased sharply, especially from the fourth quarter of 2022. in the end, the euro area economy expanded by 3. 6 % in 2022, still higher than in the us, despite a slowdown in the second half. the likelihood of a recession in 2023 is now very remote, and growth prospects have even been revised upwards, to 1. 0 % in 20231 ( up by 0. 5 percentage point compared with december forecasts ), before rebounding to 1. 6 % in 2024 and 2025. faced with a historic geopolitical and economic shock, europe has shown remarkable resilience, and greater unity. euro area inflation further accelerated after the invasion of ukraine, but the outlook for 2023 and beyond has also recently improved – although with mixed news. on the

see, the ssm is well on track and i am fully confident that it will be operational at the end of this year, as expected. but this good result should not lead to forget that for the banking union to be fully successful, the ssm needs to be completed with the adoption of a single resolution mechanism. indeed, in line with my colleagues at the ecb, i consider the single resolution mechanism to be another essential pillar of the banking union, alongside the ssm. ideally, the srm should consist of three main elements : a single system, a single authority and a single fund. this is why the ecb has constantly been encouraging all the relevant parties to make further progress in adopting the srm, which should be in place by the time the ssm becomes operational. you know that a political debate is taking place currently between the european council of ministers and the european parliament. the version of the srm that has been agreed among european governments at the end of last year is not ideal, notably because it requires a long transition period which could fuel uncertainties. but what matters most is that we have clear and common set of rules concerning banks resolution. for the mechanism in itself, europe has proven in the past that, confronted to acute crisis, it was able to accelerate the processes and deepen its solidarity. ladies and gentlemen, i hope i have managed to give you a clear and up - to - date picture of the advance towards banking union. i would like to conclude by stressing just how crucial this development is in order to strengthen our economic and monetary union. i think that the ecb proved, in the darkest moments of the crisis, that it was completely committed to the euro. our actions were driven by a profound belief that the single currency is our most valuable shared asset and that it brings enormous economic benefits. today, with the construction of a banking union, we aim to demonstrate that this is a long - term commitment. thank you for your attention. bis central bankers ’ speeches