[Otherwise] it would be unrealistic to expect the Community to be able to square a circle that has never been squared.”6 The early 1990’s were indeed difficult times for the European monetary system: several countries were forced to realign their exchange rate or to withdraw As  2/8  BIS central bankers' speeches  from the mechanism, like for instance Italy in 1992. It was that same year, with the Maastricht Treaty, that Europe chose to move forward towards a European monetary union. Tommaso Padoa-Schioppa was right in his belief and in his recommendation to create the euro. The euro has proven to be a great success which has delivered material benefits. First, price stability, which is the main objective assigned to the Eurosystem, and which directly benefits euro area citizens’ purchasing power. In the 18 years since the introduction of the euro (1999–2016), inflation has stood at 1.7% on average, compared with 4.6% in the 18 years preceding the introduction of the euro (1981–1998). Second, lower interest rates, which are the corollary to the confidence that investors place in our currency, and which can be measured by the decrease in long-term interest rate spreads vis-à-vis Germany, amounting to between –1.5% for France and –3.7% for Italy. Third, internal exchange rate stability, and a greater international role. Today, the euro accounts for 20% of international reserves, second only to the dollar. And an internationally recognised currency generates economic gains: financial markets are more attractive to domestic and foreign investors, more liquid, and thus more efficient.
François Villeroy de Galhau: The future of the euro area - from the "impossible trinity” to the "growth triangle" Text of the 6th Annual Tommaso Padoa-Schioppa Lecture by Mr François Villeroy de Galhau, Governor of the Bank of France, at the 6th Annual Tommaso Padoa-Schioppa Brussels Economic Forum 2017, Brussels, 1 June 2017. * * * ​I am grateful to Carine Bouthevillain, Bruno Cabrillac, Laure Carrel, Pavel Diev, Marine Dujardin, Pierre Jaillet, Eloïse Lecouturier, Céline Mistretta-Belna and Edouard Vidon for their assistance in preparing these remarks. Ladies and gentlemen, It is a pleasure to be here in Brussels and to speak in front of such a distinguished audience. For my generation of modest European architects – I was in Maastricht 25 years ago – Tommaso Padoa-Schioppa is one of those great – almost mythical – Italian figures who engaged in this “Kantian quest for European unity”1. So I am honoured to give a lecture named after him. He would certainly have been very pleased that the majority of French people clearly expressed their attachment to the euro on the occasion of the French presidential election. Giving fresh momentum to the European project is indeed one of the priorities of the new French President. And although I was invited several months ago, and although the Banque de France is fully independent of the government, I like to think that my presence here this morning is a sign that there is renewed interest for the voice of France in Europe.