François Villeroy de Galhau: The reawakening of Europe and the Franco-German engine

Speech by Mr François Villeroy de Galhau, Governor of the Bank of France, at the Frankfurt School of Finance and Management, Frankfurt am Main, 12 December 2023. 

The views expressed in this speech are those of the speaker and not the view of the BIS.

Dear Students, Professors, Ladies and Gentlemen,

I am delighted to be with you here today, and I extend my warmest thanks to former Bundesbank President Jens Weidmann, as well as to Professor Emanuel Mönch for their invitation. Lieber Jens, it is a great pleasure to meet with you tonight, admittedly in different circumstances to those we experienced during six years here in Frankfurt when the alphabetical seating chart at the ECB's Governing Council meant that we were seated almost side by side during meetings. We have shared a lot, while forging our mutual understanding and, even more importantly, our friendship. Tonight we are on the eve of a monetary Governing Council meeting and in a 'silent period'. In other words, I will not speak about monetary policy during this speech. Let me just recall that, after peaking at 10.6% in October 2022, inflation receded to 2.4% in the euro area last month i.

Taking a step back, the euro has proved remarkably stable over time, with inflation averaging 2.1% since its introduction in 1999ii, compared with 4.9% over the two previous decades. And the single currency has helped to protect the purchasing power of European citizens, which has grown by nearly 17% since 1999. The euro inspires trust, which is the core value of a currency, and has proved a popular success. The latest flash Eurobarometer poll, conducted in October, reported that 79% of euro area citizens (and 80% in Germany) are in favour of the euro: that's up from 63% a decade ago. The euro is "Europe in the citizen's pocket", and the most concrete and advanced form of European integration.