benoit cœure : interview with france 24 interview with mr benoit cœure, member of the executive board of the european central bank, with france 24, conducted by ms stephanie antoine on 8 june 2016, and broadcast on 9 june 2016. * * * the pound sterling took a further hit following news that the brexit camp might win the eu referendum. the imf believes that a brexit would cause the uk ’ s gdp to fall between 1. 5 % and 9. 5 %. what would be the impact of a brexit on the british and european economies? have you quantified it? it is not the job of the ecb to make this kind of calculation. the imf does that very well already. i think they have clearly explained the possible mechanisms. we believe that it is in the uk ’ s interest to stay in the european union and in the eu ’ s interest to keep the united kingdom in the eu. together we are stronger, and we will all be stronger, including the uk, if it stays in. of course, it ’ s now a sovereign choice and the decision of the british people must be respected, whatever it may be. are you concerned about a brexit? the competent authorities are preparing for all scenarios, as they should. in this context, the ecb ’ s responsibility is quite limited. it is to provide reassurance on the possible impact of a brexit, if that came about – which we hope not – on the confidence of economic players and on the stability of the financial markets. from that perspective, the ecb is preparing itself for all eventualities, as it has always done in such circumstances, and preparing to take steps to stabilise the markets, notably by providing liquidity, as we have always done in such circumstances. it ’ s simply what we do. so a brexit could have an impact on the ecb ’ s monetary policy? no, not necessarily on monetary policy, but on the access of economic players to liquidity, even if i firmly believe that won ’ t be necessary, because everything has been well prepared. if it did prove necessary, and we will do what we have to, in coordination with other central banks, as we have always done in these circumstances. turning to greece, an agreement was reached on 24 may between athens and its creditors, and the tug - of - war to release the next tranche continues. what do the

think laurent berger has said ; it ’ s a law that will create jobs, especially for the young. so it should be done – is that what you ’ re saying? yes. but it ’ s certainly not up to the ecb to judge the details, the legal form, the various articles... what i ’ m saying is that there is a dynamic under way in labour market reform bis central bankers ’ speeches which, experience has shown, has been a success in other european countries, regardless of their political inclination. should the public deficit be increased, just in order to push through a structural reform like this one? this is an important debate, but it ’ s also important to draw a distinction between countries. in general, it is true that, from the ecb ’ s point of view, monetary policy has had a lot to do to stimulate growth in recent years ; better support by fiscal policy would allow the ecb to do the job better. we are convinced about that. now, the kind of fiscal support necessarily differs from country to country depending on their budgetary and economic situation. it has to be said that there are very few countries in the euro area that have the fiscal space, that have the freedom to increase their deficit... is that the case for france, mr cœure? no, i don ’ t think that is the case for france. france ’ s public debt has increased very rapidly over the past 10 – 15 years, regardless of the government in power, so, again, this is not a matter of politics. french public debt has increased very sharply. can we really afford today to advise the french government, of whatever kind, to increase the debt still further, to incur further debt for the french? i think the answer is “ no ”. therefore, the remedy differs according to the country. in all euro area countries, however, there is significant fiscal space to have a coherent mix of fiscal policy, i. e. make an effort to redress unproductive spending, to steer fiscal policy towards promoting growth, i. e. either by cutting taxes when they are too high or by making public investments, especially for young people, in research, innovation, or wherever it can be put to good use. so this discussion on the quality of public spending is important for all countries and it is important for france. aren ’ t the monetary policies of the central banks – with their very low, even negative, interest rates