president of the french republic speaks of the necessary " european sovereignty ". i am aware that this expression gives rise to debate. in any case, it means that europe must not passively put up with events, in the face of the growing rivalry between the united states and china. that we can and should be proud collectively of our achievements. in the economic sphere, these are the single market, the single currency, and our european social model - the soziale marktwirtschaft. the world needs europe, today. we must be decisive... and at the same time aware that economic rigour is a prerequisite for our political influence in this world of 2020 so fraught with danger. this brings me to what i want to say today. so far europe has stood firm in the face of a shock of unprecedented severity : this will constitute the first part of my speech. and i will then address the following question : can reconstruction now strengthen europe and the franco - german alliance? * * i. so far europe has stood firm in the face of a shock of unprecedented severity over the past six months, we have experienced a crisis of unprecedented proportions : the most serious that the european economy has endured since 1945. the european project has been 1 / 4 bis central bankers'speeches subjected to a veritable full - scale - almost existential - " stress test ". but, to date, europe has held firm. europeans have an essential asset : their common social model based on social solidarity and organised public services. for instance, household purchasing power has been preserved overall, thanks in particular to short - time working measures. this is one major difference with the united states, where 22 million jobs were destroyed in a matter of weeks. we know that the health shock has affected european countries to varying degrees, but the economic shock has been more symmetrical, due to the restrictive measures that ended up being substantial in all countries. gdp figures for the second quarter show that the recession is widespread, with double - digit percentage declines : - 11. 8 % in the euro area, - 13. 8 % in france and - 9. 7 % in germany. almost half of the differences between our two countries can be attributed to the construction sector, which has contracted much less in germany, and more than half to the differences in methodology regarding public services statistics. the european response to the health crisis was initially monetary, thanks to the rapid and decisive action of the eurosystem. i attended the

not, have provided important links between the federal reserve banks and the businesses and communities your institutions serve. we have reached out and listened to community bankers through their representation on our boards of directors and advisory councils, as well as through our ongoing contacts with individual firms and the business organizations you serve. the insights we gather from community bankers in our district help me as a policymaker bring main street perspectives to the national policy table each time the federal open market committee, or fomc, meets in washington. when such information from all the districts comes together at our meetings, it forms a rich mosaic of our economy that helps shape our monetary policy decisions. bis central bankers ’ speeches so, i want to thank nick difrancesco, president and ceo of the pacb, and dennis cirucci, your chairman, for inviting me here today. i also want to publicly thank dennis for serving so ably on our bank ’ s community depository institutions advisory council, or cdiac, and as our council ’ s representative to the board of governors. my last opportunity to address the pacb was in september 2007, a very different economic environment than we find ourselves in today. i used that speech seven years ago to discuss the federal reserve ’ s initial responses to growing financial instability in the housing sector. i explained that the fed ’ s role in promoting financial stability rather than its monetary policy responsibilities had prompted the short - term injection of some $ 68 billion in liquidity through open market operations in early august 2007, a mere 12 months after i joined the fed. that seems like a long time ago and much has transpired since then. at the time, the fomc had yet to lower the federal funds rate from its target of 5. 25 percent. weeks later, though, the fomc began to lower the federal funds rate target and then kept lowering it to essentially zero in december 2008, as the global financial crisis and the ensuing great recession enveloped economies around the world. the rate has been near zero for nearly six years now, and the fed has augmented its aggressive policy actions through large - scale asset purchases, now tallying in the trillions, rather than in the billions of dollars. today, i would like to give you my assessment of the u. s. economy and then share some thoughts about the stance of monetary policy. i should note that my views are my own and not necessarily those of the federal reserve board or my colleagues on the fomc, which will shortly