Thus, when the Monetary Policy Council makes interest-rate decisions, it bears in mind first the objective of preserving the purchasing power of the currency, for and on behalf of all French people, and second, its corollary, namely the creation of monetary, financial and competitive conditions that will allow our economy to achieve its full potential for sound and sustained growth, for job creation and therefore for combating unemployment. Central Banks cannot “command” growth. Growth is the fruit of the labour of men and women, of the efficiency of employees, workers and engineers, of the imagination and skill of business leaders, and also, more broadly, of the influence of European and international business conditions. It is stimulated, in the medium and long term, by structural reforms that liberate initiative, strengthen the dynamism of the economy, combat unemployment effectively and encourage the creation of the greatest possible number of jobs for a given level of wealth and growth. However, it is up to Central Banks to create the best possible monetary and financial conditions, through the credibility and stability of the currency. These conditions now exist in our country and the Monetary Policy Council is convinced that the time has come for firms and households to invest. In many sectors and firms, the financing exists. The self-financing rate of the entire French productive sector is above 100% overall. Interest rates as a whole are at historic lows. The French economy has substantial BIS Review 2/1997  -6-  potential for growth in the medium term.
Second, the Monetary Policy Council has set monetary policy against the background of potential growth for the French economy of around 2.5% per year. We consider the average growth of our economy in the medium-term, and it could be exceeded given that we have a potential to catch up in the medium term. We reckoned with a maximum price increase of 2% and potential real growth of between 2.5% and 3% in the medium term to arrive at a figure of 5% for the medium-term growth trend of the money supply. * *  BIS Review 2/1997  *  -5-  It is very important to bear in mind the essence of the policy implemented by the Monetary Policy Council. Parliament confers on the Banque de France an objective, namely the objective of price stability. Maintaining the value of the currency preserves the purchasing power of the currency, and therefore that of French citizens. In addition, Parliament has sought to create the conditions for growth and for job creation, via the stability of the currency. This is also the goal of the Monetary Policy Council. To achieve this goal, we use two means. First, by preserving the value of the currency, we enhance its credibility in France, in Europe and in the world and allow our economy to benefit from financing at favourable market interest rates.