As the Prime Minister rightly declared recently, "the time has come for proof on the ground, rather than legislative cathedral building". xii I am well aware of the risk of appearing to give easy or excessively theoretical lessons, but I speak here with the conviction of the practitioner and even - if you will allow me in this last part of my speech with the passion of the public servant. Public management is not necessarily an easy task, but it is possible. Calling for the transformation of public services today means refusing to become resigned to a public service that is seen as outdated and unable to cope. I believe in the public service as a national asset: throughout our long history, from Bonaparte to Charles de Gaulle, public services have frequently been a catalyst for unity, modernity and even productivity. Transforming public services can and must serve to boost France’s competitiveness. xiii Pious hopes? No! There are perfectly good examples of modernisation of public services here in France, even in the very recent past. We could talk about our army, but I'll start with the current Public Accounts Directorate (Direction Générale des Finances Publiques), formed from the merger of the National Tax Office and the National Public Accounts Office (Direction générale des impôts and Direction générale de la comptabilité publique).
Overall, we expect price stability to be maintained over the medium term, thereby supporting the purchasing power of euro area households. Inflation expectations remain firmly anchored in line with our aim of keeping inflation rates below, but close to, 2% over the medium term. The firm anchoring of inflation expectations remains of the essence. Monetary policy will do all that is needed to maintain price stability in the euro area over the medium term. This is the necessary and central contribution that monetary policy makes to fostering sustainable economic growth, job creation and financial stability. All the nonstandard measures taken during the period of strong financial market tensions, referred to as “enhanced credit support” and the Securities Markets Programme, are fully consistent with our mandate and, by construction, temporary in nature. We remain firmly committed to price stability over the medium to longer term, and the monetary policy stance and the overall provision of liquidity will be adjusted as appropriate. Accordingly, the Governing Council will continue to monitor all developments over the period ahead very closely. Let me now explain our assessment in greater detail, starting with the economic analysis. After a period of sharp decline, euro area economic activity has been expanding since mid2009. According to Eurostat’s first estimate, euro area real GDP increased, on a quarterly basis, by 0.2% in the first quarter of 2010. While adverse weather conditions, in particular, dampened growth in the early part of the year, the latest economic indicators suggest that a rebound took place during the spring.