I will not elaborate on Asia, but on Europe, and the European Monetary and Economic Union. **  I. The need for active multilateralism to face our global challenges. Let me start with my first point: the need for active multilateralism to face our global challenges. We have to strive to maintain the collective rules of the game, at international level and with all our partners. In the current context, international cooperation between countries is more important than ever: it is essential to preserving the improvement in the global economic environment. The global recovery has indeed been gathering pace since 2016: according to the latest IMF forecast, global growth should stand at 3.6% in 2017, after 3.2% in 2016, while in Japan real GDP growth should pick up to 1.5% in 2017 after 1.0% in 2016. Moreover, growth in the euro area should reach at least 2.2% this year, reflecting a strong economic recovery. However, there are two major risks threatening growth: financial instability and protectionism. Regarding financial instability, the continued rise in global public and private debt since the start of the 2000s – from 190% of global GDP in 2001 to 230% in 2016 [slide] – has become a subject of concern. The 2008 crisis stemmed from this, but this trend has unfortunately not slowed down since; the private debt in emerging countries (namely corporate debt) has risen particularly rapidly.
But this must not stop us from making progress straightway on the first two accelerators, in order to breathe new life into the Economic Union. These accelerators would contribute to the functions of economic policy, as described by Musgrave:iii allocation, stabilisation and distribution. The allocation function would obviously be the role of the micro accelerator, but also of the fiscal one. The stabilisation function could be ensured mainly by the macro accelerator, but also by the micro one, thanks to enhanced private risk sharing, and possibly by the fiscal one. Finally, a distribution function – if any – could possibly fall to the fiscal accelerator provided that its implementation does not result in a “transfer union” which would be a one-way budget. ** I would like to conclude my speech by quoting Kazuo Ishiguro, who was awarded the Nobel Prize in Literature for 2017 and who was born in Japan: “If you are under the impression you have already […] perfected yourself, you will never rise to the heights you are no doubt capable of.” iv These words could apply to our international cooperation since the crisis, as well as to the European Economic and Monetary Union. Both are undeniable successes and it is well worth emphasising it. But this should not prevent us from making progress towards a better functioning of the Economic Union. I strongly believe that we could achieve something that even today may still be considered unbelievable. Thank you for your attention.