growth, and how to combine these goals with the necessary fiscal discipline that serves to balance the interests among the present and future generations. important steps have been taken on the european level as regards the implementation of fiscal rules and consolidation measures. the euro area general government deficit has declined significantly ; public debt should stop rising next year and decline thereafter. the extent of the progress on this front is insufficiently acknowledged and worth noting. everywhere governments have undertaken significant and difficult reforms and continue to do so. although more work is certainly needed, we should appreciate how quickly things improve when serious action is taken. to foster employment and growth policy makers have to address macroeconomic imbalances in the euro area. while monetary policy will continue to ensure price stability in the euro area as a whole and cannot address inflation rates in individual countries, relative competitiveness adjustments can and need to occur at the country level. these adjustments need to be driven by national policies. the countries that experienced unit costs systematically above the euro area average and lost competitiveness will have to regain competitiveness. this can be achieved through a combination of cost moderation – including in some specific cases of past excesses, decisive adjustments – productivity gains and technological change. in this process, they should experience unit costs below the euro area average – possibly for a sustained period in case of large earlier competitiveness losses. the ecb ’ s focus on price stability in the medium term for the euro area will contribute to an anchoring of longer - term inflation expectations in all countries. before concluding, let me comment briefly on the difficult situation in greece. since the treaty does not foresee anything on exit, this is not a matter for the ecb to decide. while the ecb will continue to comply with the mandate of keeping price stability over the medium term in line with treaty provisions and preserving the integrity of our balance sheet, i want to state that our strong preference is that greece will continue to stay in the euro area. dear jose manuel, you joined the executive board of the european central bank 8 years ago, in 2004. since 2006, we were both members of the governing council, and i still recall extensive meetings in which jose manuel presented to the governing council one item after another on a very wide variety of subjects – ranging from the implementation of monetary policy to the new series of banknotes or to complicated statistical and risk - management bis central bankers ’ speeches issues – with the same degree of commitment and full command of the most technical details. and of course we

christian noyer : the euro area sovereign debt crisis speech by mr christian noyer, governor of the bank of france and chairman of the board of directors of the bank for international settlements, at the bank of france / toulouse school of economics conference “ the euro area sovereign debt crisis ”, paris, 19 december 2011. * * * ladies and gentlemen, it is a great pleasure for me to give the introductory address to this stimulating conference that the banque de france is very pleased to organize jointly with toulouse school of economics. obviously, finding a more topical subject would be difficult, now that euro area ’ s sovereign debt markets are caught in the vortex of the financial turmoil that has been plaguing the world economy for the last four years. this topic is also the one we have chosen for our next financial stability review, to be released next march, with a significant number of contributions stemming from today ’ s presentations. the current crisis is indeed extremely challenging. many complex factors are currently interacting, making policy decision - making particularly difficult. in such a context, academics have a critical role to play to help us clarify the tradeoffs and available options, so that we are better able to make the right choices in real time. this very fact that intellectual inputs from research are a precious resource in times of stress and multi - faceted uncertainty confirms me in my view that central banks ’ investment in economic research, be it in - house or through partnerships with academia, is a very valuable asset. therefore, i also warmly welcome this conference as being one brilliant illustration of the benefits brought by our three years long partnership with toulouse school of economics ( tse ). note however that, while the organization of high - level academic conferences has been an important achievement within this partnership, it is not the only one. indeed, many avenues of fruitful collaboration have developed. two series of regular joint seminars, one on monetary economics, the other on financial stability, and several workshops have notably contributed to strengthen the links between banque - de - france and tse researchers and stimulate the scientific and policy debates. i would also like to take this opportunity to thank jean tirole for his personal involvement in the exchanges with banque de france. last but not least, let me also advertise the new banque de france – tse senior and junior prizes in monetary economics and finance which purpose is to distinguish outstanding contributions by academics. the first prizes will be awarded for the first time on 16 march 2012. in the