BdF - Interview with Christian Noyer, Governor of the Banque de France

Interview with Christian Noyer, Governor of the Banque de France,
Europe 1 – 6 January 2012

"...
JEAN-PIERRE ELKABBACH
But as the Governor of the Banque de France and member of the ECB’s governing council, you are aware that the euro is currently subject to growing scepticism. Do you think it will still exist in let’s say one year, two years, or three years time?

CHRISTIAN NOYER
I have no doubt that it will still exist. The euro is an irreversible choice. The euro is a currency based on a system that can function perfectly well. We have a temporary problem not related to the currency, that of Member State budget control over the first ten years of the euro’s existence which simply needs to be resolved. And the Member States have already taken the right decisions... they simply need to implement them.

JEAN-PIERRE ELKABBACH
But you are perhaps saying that in order to maintain confidence… you’re an optimist... But the reality, for us? Is it definitive? Are you saying that the euro is irreversible just to reassure us?

CHRISTIAN NOYER

The euro is absolutely irreversible, I have no doubt about it. We are not turning back the clock. People should stop fantasising about the demise of the euro. It is really an irreversible reality, it is OUR currency for the future.

...

JEAN-PIERRE ELKABBACH
But, for example... we are in the midst of a presidential election campaign that is already lively and which is bound to intensify. But ... beyond the habitual political invective, what recommendations do you make from your standpoint?

CHRISTIAN NOYER
Its very simple. What I am saying is no different from what Didier Migaud (President of the State Audit Office Cour des Comptes) says... we need to rebalance public finances via debt and deficits reduction, quickly and credibly. And we need to improve our competitiveness, which, although not bad, has fallen behind that of Germany in the last 10 years. The best level of euro area competitiveness should be the target we should aim for collectively.

...

JEAN-PIERRE ELKABBACH
The ECB, with Mario Draghi, does not aide States directly. It is prohibiting from doing so by its Statutes. But its lending to banks has the effect of providing relief for the States concerned. Do the banks then buy sovereign debt?

CHRISTIAN NOYER
That’s right! We refinance the banks so that they can extend credit to the economy. And personally, I expect the banks to be more active in supplying credit to the economy... that they should play a much more dynamic role. That is why we lend them money on very favourable terms and we guarantee access to this money over several years..."

Source: http://www.banque-france.fr/uploads/tx_bdfgrandesdates/interview-Europe1-2012016-en.pdf