We all share the same social model – to which we are strongly attached – combining a high volume of public services with markedly less inequality than in other countries – for example in the United States. The right response to inequality, therefore, is not a change of monetary policy. And it is not more protectionism, even though the rules of global trade need to ensure the benefits are spread more widely. The correct response to inequality is to develop the right social model. d) The euro is controlled by technocrats in Frankfurt Yes, Frankfurt is in Germany… just as Brussels is in Belgium. But yes, despite this, the ECB belongs to us all: not just to the Germans – as the Italians tend to think – and not just to the Italians – as the Germans tend to think. With the Eurosystem, that is the ECB and the 19 national central banks, we have had a genuine federal system, one that works, since 1999. We take our decisions collegially, within the Governing Council, and then apply them in each of our member countries. ECB staff – at the heart of the system – only account for 5% of total Eurosystem headcount. France and Italy thus have much more say in decisions today: before the advent of the euro, de facto our monetary policies closely followed that of Germany.
b) The euro is an “all-risks insurance” for all Member States This view appears to be the opposite of the preceding one; in fact it stems from an equally false perception: attributing excessive evils or benefits to the euro. A currency is an essential nominal value; but this alone does not determine the real performance of the economy. In the first part of the 2000s, once it had acquired the collective gain of the euro, France and Italy, like many 3/6  BIS central bankers' speeches  Southern European countries, wrongly believed that it was possible to let up on competitiveness efforts, which are nonetheless an ongoing imperative – “there is no free lunch”. Today we are suffering the consequences: we have lower economic growth and employment than some of our neighbours, such as Germany and Spain, which succeeded in carrying out the reforms necessary for enterprise (corporate sector), employment, education and expenditure reduction (public sector). Contrary to what some say, our lag in growth is not due to excessive fiscal discipline. The government debt to GDP ratio has more than doubled in Italy since 1980, and it has risen fivefold in France. When my generation was 18 years old, debt stood at 20% of GDP in France. For your generation today, it verges on 100% of GDP in France and in Italy stands at over 130%. We have failed when it comes to intergenerational solidarity and sustainable development.