The damage caused by a period of non-growth, with two recessions, is considerable. There is, of course, structural unemployment, but business investment also declined considerably during this period and has still not regained its 2008 level. Countries have also cut back sharply on infrastructure investment. And has the financial sector stabilised now? The financial sector is on a firmer footing. It has largely been recapitalised. Banking supervision is now carried out at European Central Bank level, and that is a very positive development. But pockets of fragility still exist, for example the level of non-performing loans in some countries. Provisions have been made for these debts, but they are an element of fragility nonetheless. The low profitability of some banks and the level of public sector debt, which is still significant, should also be underscored. Before the crisis, public debt in the euro area represented 60% of GDP, but today it stands at nearly 100%. To conclude, the economic situation in the euro area is improving but remains difficult. The main challenge for the euro area will be to demonstrate its ability to bring prosperity and security. An enormous amount of work remains to be done. To this must be added the political risks of what I call “seeping pessimism”. There is still considerable support for the euro but at the political level greater European integration is still rejected to some extent. That is one of the risks for the coming years.
France has already said that it will take a few liberties with the European deficit limits. Shouldn’t the fiscal straightjacket on Member States be loosened? This has been a little bit overstated, because the security figures are quite low in the budgets, and it is not prohibitively expensive to strengthen security. Of course, it is relevant from a fiscal  2  BIS central bankers’ speeches  point of view, but the amounts are not very high. By contrast, if we include the cost of national defence under security, then the figures are potentially higher. However, it should be emphasised that this is not the source of France’s fiscal woes: it also has a well-known structural problem. How can we counter the surge in nationalist and populist currents in Europe from an economic perspective? By delivering the prosperity and economic security that was promised when we created the euro area. Today, we have the same level of economic output as we had eight years ago. The crisis caused significant economic and social pain, notably in the countries that experienced a drop in their living standards. Inequality has risen as a result of unemployment. This is unacceptable socially and has political consequences. There is no obvious willingness to integrate the euro area further. We are at a turning point. Integration at the financial level is progressing, but the European project as a whole needs to be further deepened.