First, because even though the current economic cycle is in a very robust phase today, it will come to an end at some point. If we have not armed ourselves with stronger economic instruments by that time, there is a risk that monetary policy will be overburdened. This is a well-founded German worry that as a central banker I share entirely; but it is for that very reason that I say to our German friends that they must aspire to an enhanced economic union. Second, because the absence of a genuine economic union is holding the euro area back, at a time when we must stimulate growth to catch up our past lag, particularly vis-àvis the United States, and address the radical technological transformation. The theme of this evening is “new ideas for Europe". But to have new ideas, we must begin by putting the old clichés that are paralysing the debate behind us. That is what I will begin by doing, before setting out my three new ideas for Europe. ** 1. Three old clichés that we must put behind us The first old cliché that emerges when we speak about reforming the euro area, is the idea – and a lazy idea at that – that economic union would be a substitute for national reforms. I would like to repeat right away that on the contrary, national reforms are a prerequisite for any enhancement of the Economic Union, and today, France is well aware of this.
In 1978, Helmut Schmidt said that “the citizens of Europe just want solutions to concrete issues".2 Nonetheless, we need a political ambition if we are to act – call it a “vision", if you wish. We need this because we have to make progress – it’s now or never: thanks to the economic recovery, and thanks to President Macron’s initial proposals at the Sorbonne, and the European chapter of the German coalition agreement – it is obviously not my place to comment on the rest of the agreement – we are enjoying historically favourable conditions. If we don’t act in 2018 – first the French and Germans, and then all 19 member countries of the euro area – we will never make headway. 2. How to strengthen the euro area: three new ideas I will now turn to my three new ideas to strengthen the euro area. In order to make genuine progress in Europe, we must first start with the real needs for corporate investment, and the resources at our disposal. In terms of needs, the key to growth in the euro area today is, without doubt, innovation. Chancellor Merkel spoke about it in Davos three weeks ago, while companies in Bavaria are well placed to recognise its importance: over the past 50 years, Bavaria has radically transformed its economy by rising to the challenge of innovation.