Page 5 of 19 This chronic deficit has been shared by all governments and parties in power for over forty years, despite some temporary improvements in the late 1990s and early 2010s. Aside from the much greater 'ratchet effect' of spending in France than in other countries, this French malaise is reflected in – and partly explained by – two symptoms of a more political nature. Two symptoms of the French malaise First, we are multiplying the number of commitments to budgetary targets, but so far we never adhere to them. Management of public finances is deemed to have evolved into a more multi-year process - which is a good thing - with the adoption of public finance planning acts from 2009 onwards, but also as a result of the requirements of the EU Stability and Growth Pact since 1999. However, when it comes to executing the process, the comparison with Germany is cruel indeed: our German neighbours systematically outperform their forecasts and commitments, while we systematically do worse than ours. Page 6 of 19  These persistent and significant shortcomings severely damage our credibility in Europe and in the eyes of all French citizens. I would like to applaud the determination currently being shown at the "Assises des finances publiques" (round table conference on the public finances) in Bercy. Some people are calling for more ambitious targets, but a first real revolution would be to stick to existing ones.
This will provide a clear division of responsibility. Could the discussion about new banking sector regulation be a case of the pendulum swinging back towards the regulatory optimism that I described earlier? The picture is probably more nuanced. The banks have shown a striking ability to adapt, a skill which they hardly intend to relinquish. It must be acknowledged that no regulation can prevent financial institutions from encountering difficulties. A new regulatory framework must therefore ensure that banks have the ultimate responsibility for the risk undertaken. Regulatory compliance will then also be in their own interest. Conclusion In my address this evening, I have sought to gather together some historical threads relating to the design of economic policy through our recent history and at the same time provide some glimpses of developments in the field of economics. Views on macroeconomic management have changed in this period – influenced by economic developments and events. Perhaps the policy response during the financial crisis also reflected a swing of the pendulum towards increased regulatory optimism. On the other hand, the financial crisis required full deployment of instruments. Measures were far-going and some were unconventional. In some countries, the bill to be paid is substantial. In their prize-winning work, Kydland and Prescott raised the question of discretion versus policy rules. Today, we have perhaps opted for “both, please”. An economic policy that is conducted blindly according to a rule, or only oriented towards solving day-to-day problems, can have adverse effects.