Bank of France’s Noyer: Euro rise not due to monetary factors.

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Sep 3, 2013
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I have the honour of submitting to you, as required by law, the report on the operations of the Banque de France, monetary policy and its outlook. For France, the coming period is both one of reckoning and of opportunities. A time of reckoning, because the
country can no longer put off consolidating its public finances and improving its competitiveness. And a time of opportunities, because the recovery, albeit gradual, of the world economy and the euro area and the major changes in economic strategy could restore France to a path of sound, sustainable and job?creating growth, after two years of quasi?stagnation. Economic policy faces
two challenges: at the European level, consolidating the stabilisation and recovery process; at the national level, continuing in a consistent manner to shore up public finances and improve external accounts. The euro areaAfter more than three years of serious difficulties, the euro area has now stabilised and can return to a path of growth. Its recovery, which is already perceptible,
is based on three interrelated successes. First, the success of adjustment efforts in many countries. In the euro area as a whole, deficit?to?GDP ratios have fallen by over a quarter in the past two years. Furthermore, economic competitiveness, measured by unit labour costs, has improved over the same period, by 20% in Ireland, 15% in Greece and Spain and almost 10% in Portugal. The fact that these countries have now returned to a path of sound and sustainable growth, underpinned by investors, is the proof that the recovery plan implemented was the right response to the crisis.