in increased flexibility in the labor market during the past two years, employment has grown faster in europe than in the united states. there has been strong job creation, particularly in the new economy, as can be seen in the remarkable increase in employment in the it companies listed on the “ new market ”. employment in this sector rose by more than 40 % in france and germany. besides the improvement in the job situation in the euro area, which results from better economic prospects, it should be mentioned that over the past few years the european union has embarked on determined efforts to promote structural reforms aimed at improving the functioning of labor markets. european countries increased flexibility in the labor market, in particular by developing part - time and temporary contracts. let me quote some figures to illustrate this point : – from 1995 to 1999, part - time employment rose from 14 % to 17 % of total employment in the euro area. this proportion is more important than in the united states, where it amounts to around 13 % of total employment. more than half of overall net job creation was due to part - time employment. – in conjunction with this development, temporary employment in the euro area rose to 15 % of total employees in 1999. it is also worth mentioning an emerging trend towards more cross - border mobility of human resources, especially among young people. more and more university degrees include a stay in one or two foreign universities, thus helping to overcome linguistic and cultural barriers in europe. last but not least, a key feature which has fostered job creation in the euro area in recent years is wage moderation, together with reductions in the social charges imposed on employers. this has largely contributed to the emergence of an environment favorable to price stability and low unit production costs, strengthening the competitiveness of our european economy. finally, all countries have experienced significant fiscal consolidation in the 1990s enhanced european performances are also evidenced by the significant fiscal consolidation pursued in europe in the 1990s. the general government deficit for the euro area fell by 3. 5 percentage points between 1993 and 1997 and was brought back below the 3 % threshold. since then, deficits have continued to fall. the most recent data point to a public deficit of 1. 2 % of gdp for the euro area in 1999, down from 2. 0 % in 1998. four countries of the euro area have managed to achieve a fiscal surplus since 1999. the fact that european member states have made significant efforts in order to improve their public finances does not mean that the process of fiscal consolidation is

briefly on these two points. as regards the lack of structural reforms, i hope that my previous remarks have underlined that the euro countries have clearly embarked on major structural reforms - triggered by the single market and the single currency - that will bear lasting effects on the functioning of their economies. the central banks of europe call for the pursuit and reinforcement of these reforms. at the same time, in order to serve these economies in the most efficient way, the euro financial markets are experiencing the deep and rapid integration process that i described previously. on the second point, one has to keep in mind that the american and european economies are not positioned identically in the economic cycle, as the latter are probably at the beginning of a more robust phase of expansion. according to imf forecasts, growth should reach 3 % in the euro area in 2001, compared with 3. 2 % in the us. from a central banking perspective, the present situation is clearly characterized by a misalignment of the euro if one refers to the euro area fundamentals : robust domestic growth, inflation under control, strong domestic savings, healthy external accounts. we are, to a certain extent, in a situation symmetric to that which prevailed in 1995 when the weakness of the dollar was clearly out of line with the fundamentals of the us economy. at that time, it took a few months before a correction appeared that aligned the dollar with its economic underlying fundamentals. the euro has experienced a similar episode recently. this situation seems to be about to correct itself, now that more and more signs point to a closing of the growth gap between the united states and continental europe. thus, the potential appreciation of the euro is more than ever a topical question. this potential clearly reflects the economic soundness, dynamism and strengths of the euro area, supported by the structural reforms under way. as these winning cards, if i may say so, are now materializing more and more clearly, i am confident that market participants will soon share our analysis.