equivalent of the current defence budget. it would therefore be irresponsible to build our future on the already outdated bet of a zero or very low cost debt. a higher deficit today clearly implies less room for manoeuvre and action tomorrow in favour of ecology, health and education. the increase in the cost of debt ii. how to set a credible debt reduction strategy? 1. revised european fiscal rules this brings me to the debate that has kept you busy this afternoon : the debate on rules, in particular european rules. it has been put on hold since the start of 2020, due to the covid - 19 crisis, and now perhaps the war in ukraine. but this debate will have to be wrapped up : i neither believe in traditionalists - those in europe who simply call for a return to " business as usual " - nor in angelicists those who simply believe in the wisdom of institutional processes, or in enlightened economic debates for steering national fiscal cycles. no, experience tells us, particularly in france, that we need rules and not too much " discretion " in the sense of entirely discretionary choices. but these rules must be revised and simplified, in order to be better respected and more credible. paolo gentiloni and the european commission have the onerous task of taking page 6 of 9 forward this discussion which is a matter for political authorities, so i will just make a few remarks. it first seems reasonable to me to avoid, in this matter and at this stage, any treaty change. we could keep the 3 % deficit target, which is a useful anchor, and even the 60 % debt target. but the rule of a 1 / 20 annual linear adjustment towards the latter target has become unrealistic because it is too strict, especially for highly indebted countries. and, instead of the structural deficit which no one really understands, or even knows how to calculate accurately we could set a ceiling on the growth rate of public spending as an operational target. at constant tax rates, this amounts to much the same thing in economic terms, and was the main thrust of the reform put forward in 2019 by the european budget committee ( ebc ) chaired by niels thygesen. these rules should not simply be seen as a constraint imposed by brussels, but should be widely internalised,'taken up'in our french budgetary debate, as they are in our national interest. 2. adding a european stabilisation and investment capacity allow me to

imagine a successful exit from the forthcoming tough european and franco - german - negotiations : the southern european countries - including france - accept domestic rules for fiscal discipline ; the northern countries including germany - accept a european fiscal capacity. fortunately, here we are not starting from scratch : a major step forward has been made thanks to the " next generation eu " ( ngeu ) programme, which was designed as a means of emerging from the economic crisis caused by the covid - 19 pandemic with a dual objective of recovery and long - term strategic investment. at the moment, our priority is of course to ensure the complete success of the ngeu programme, and even to adjust it to the consequences of the ukrainian shock. but it would be wise to think in two directions for the future : we should not aim to turn one - off into recurrent, but into an available instrument. not a new annual budget, but the capacity of a tool “ at hand ” that could be activated in the event of shocks, including asymmetric ones, page 7 of 9 affecting the eu : we would avoid the spectre of a " european transfer union " so feared in germany, in favour of a capacity that could benefit all. in terms of objectives, our first economic need is that of economic stabilisation, and therefore of an instrument to be activated at the low point of the cycle. but political consensus could probably only be reached around strategic investments in climate transition, innovation or defence. for the moment, europe is betting, as ngeu has done, on a form of constructive ambiguity between these two goals : it seems advisable, as we move forward, to better clarify the way in which they are articulated. being based on a common debt, this instrument would also make it possible, should it be activated, to raise the quantity of safe european assets available on financial markets, and thus to reinforce the capital markets union and the international role of the euro. 3. focusing the debate on the quality of public spending one essential point often remains the blind spot in our budgetary debate : the quality and efficiency of public spending. i am aware of the risk of appearing to give too easy or theoretical lessons on these subjects i am a great believer in our public service, and i am affected by the current crisis it is going through. so many public services in france are suffering from the dissatisfaction of both their players - the civil servants - and their users - the citizens. pointing systematically to a lack of resources and