Governor, Mr. General Rapporteur, dear colleagues, we are therefore receiving this morning Mr. François De Galhau, Governor of the Bank of France. It has now become, one might say, a ritual to begin the new year with a hearing in your company to review the activities of the Bank of France and, more broadly, to discuss the major economic and financial issues of the moment. At the start of this year, I would like to extend my warmest wishes to you all, Mr. Governor, Mr. General Rapporteur, dear colleagues, as well as to all the staff of the Senate Finance Committee and the Bank of France, for this new year.
To begin with, you will forgive this borrowing from the language of Shakespeare, but the elephant in the room at the national level, like last year, is the budget. As with last year, it could not be adopted under normal conditions before the end of the year, resulting in the adoption of a special law authorizing revenues and decrees renewing the voted services. And as with last year, it seems that with regard to the budget balance, we are losing on one side what we are gaining on the other. Indeed, fiscal consolidation could be less severe than in the government's initial plan, raising hopes for a positive effect on growth. However, as the situation is accompanied by increased uncertainty, this is causing wait-and-see behavior from households and businesses, which could obviously lead to a possible recessionary effect.
At the end of 2024, the FCE's analyses estimated that the special law reduced the budget adjustment by 1 point compared to a budget restriction planned in the 2025 draft budget of 1.5 points of GDP, assuming that we had remained under the regime of the special law throughout the year in a context, it must be emphasized, different from this year where the draft social security financing law had not been adopted before the end of the year. It is still very difficult today to see clearly and we would like you to help us after this first experience in 2025 to understand what it entails between a brake and an accelerator in the situation in which we are proving.
I would also have liked to hear your thoughts on what seems to be a paradox, at least on the surface. Year after year, the macroeconomic results, while not good, prove to be acceptable, constantly defying often pessimistic forecasts given the expected effects of uncertainty in economic policy, which is supposed to penalize investment decisions. The Bank of France's macroeconomic projections for December still indicate a growth forecast of 0.9% in 2025, higher than in the draft budget law at the end of the fiscal year, and your experts indicate, I quote, that recent positive surprises in activity could constitute the first signs of a faster rebound in private demand. End of quote.
However, at the same time, announcements of industrial site restructuring are multiplying. As you know, the number of business bankruptcies reached its highest historical level in 2025, probably around 69,000, and the unemployment rate has been rising slightly again since the third quarter of 2024. It could reach 7.8% in 2026. How do you explain the coexistence of these seemingly contradictory indicators? What lessons should we learn from this situation?
Finally, a last word on the role of central banks and on a significant trend for the year 2025, particularly across the Atlantic. The pressures are certainly not new, but we can say that the executive branch is increasing its focus on the independence of central banks, and in particular the US central bank, to provide the boost to growth that economic policies are no longer able to deliver. However, a new development in France as well is that a party is now publicly stating its intention to negotiate with the ECB to obtain rate cuts for all of Europe. This is obviously not about preventing all economic debate, and political leaders obviously have the right to express their views on the conduct of monetary policy, but everyone will understand that these positions are germinating in this period, potentially weakening the mandate of central banks, whose independence, I remind you, exists to strengthen the credibility and therefore the effectiveness of monetary policy. I can imagine your thoughts on the subject, but we will still listen to you with interest on this point.
Mr. Governor, I give you the floor to present your analysis of the situation, both nationally and perhaps more broadly in Europe and the world. I remind you that this hearing is being broadcast on the Senate website as well as on the Senate's social media accounts. Mr. General Rapporteur, you have the floor.
Thank you very much Mr. President, Mr. General Rapporteur, ladies and gentlemen senators. Thank you for your wishes. Thank you for receiving me today and in turn I would like to return, if I may say so, on behalf of the Bank of France and the CPR, all our personal wishes and then our collective wishes for our country. So, as you said, this beginning-of-year audition has become a habit, a ritual, a happy rhythm, and I am delighted about it. As with last year, it obviously takes place in an environment that is particularly uncertain. But 2026 can and should be, I believe, a good year for the French economy, provided that we show clear-sightedness and determination.
So let me cite one example from our long history. A century later, I sometimes cite the success of an illustrious member of the Senate, Raymond Poincaré, and his recovery plan in 1926. So, it is 2026 and we French tend to be, I would say, too complacent about our weaknesses and not confident enough in our French and European strengths. So, I'll start with our cardinal weakness, the elephant in the room to use your expression, public finances. This area naturally falls within the competence of parliament and the government, but the Bank of France is legitimate in illuminating it with its overall economic analysis supported by its independence.
My conviction rests on two numerical anchors. First, our country must reduce the public deficit to a maximum of 3% of GDP by 2029. Why? In order to finally stabilize the debt ratio by reaching primary equilibrium, that is, equilibrium excluding interest payments. And the second shortcoming is that on this path, we must reduce our total public deficit to a maximum of 5% of GDP by this year 2026. This is both essential and still achievable. And let me elaborate a little on these two qualities. It's essential. I'm going to say this with a bit of seriousness. France would clearly be in the red zone, the danger zone, if it remained at a deficit above 5% in the face of financial markets that are apparently calm, but which are always susceptible to brutal reversals, particularly in the adventurous geopolitical environment of 2026.
A chain of negative signals could cause our famous credit rating to rise sharply. Resumption of European proceedings against France, further downgrade of its rating and withdrawal of certain volatile investors such as hedge funds. If we do not reduce our deficit sufficiently, as I have had occasion to say, our country risks not bankruptcy, but what I would call a triple strangulation. First, it's a budget suffocation. Debt interest will increase, as you know, by 70 billion euros that we can no longer dedicate to priority spending such as education, climate or our security.
Then, an economic suffocation. Long-term interest rates have risen more in France than elsewhere. If I take our 10-year rates before the June 2024 dissolution announcement, we were at 3.05. We are at 3.55 today due to the widening of our spread with Germany. To put it another way, our country was among the best borrowers in the eurozone. Unfortunately, it has become the worst performer. This also directly affects, as we know, businesses and households through their mortgage loans, and therefore affects our ability to invest.
Finally, there is a generational stifling effect, and perhaps one that is less frequently noted. I spoke of a triple suffocation: budgetary, economic, generational. Recent budgetary choices, including in the PLFSS, are clearly going against young people. There are higher retirement and healthcare expenses for seniors. And I say right away, I am myself a lord and seniors deserve respect, but be careful of proportions. And this additional spending on retirement and healthcare is financed by a larger deficit left to future generations.
I said a reduction was essential. There seems to be a large public expectation on this. I want to emphasize that this is a reduction that is still achievable. It is within our reach, under one condition. The national interest urgently and imperatively calls for moving beyond posturing to find compromises. So, it is not for me to go into the details of the measurements, but I just want to point out that a fairly simple alloy is both necessary and sufficient. First and foremost, to stabilize spending, which in France is the highest not only in Europe but in the world. From this perspective, the framing of the initial draft budget law seems to give a good overall order of magnitude. I emphasize the overall picture in this assessment.
On the revenue side, I believe our country must and can make taxation both fairer and more stable. If I may explain myself on this, neither competition nor systematic inaction. There are certain natural measures of justice and there may be targeted and exceptional measures as long as the deficit has not returned below 3%, for example on the profits of large companies. And for the rest, let's put it very simply, we no longer have money to lower taxes and we don't have much room to raise them. So, since fiscal stability is a necessity, let's try to make it a virtue.
So, I come now to our French and European strengths that we need to mobilize. Then I said that we also lacked confidence in our strengths. To put it another way, neither nests nor declines, neither budget cuts in France, nor economic decline in Europe. So, first a word about the situation you mentioned. In France, we have won the battle against inflation. It stands at 0.7% in our country according to the harmonized index, below the European average of 2%. This is a positive development for our country. This means purchasing power and is accompanied by wage moderation, which is positive for our competitiveness.
A word on monetary policy. After 8 cuts, the ECB's key interest rate is at 2% and significantly lower, it is perhaps not very often stressed that US rates at 3.64 or British rates at 3.75. And the downside risks to inflation are at least as high as the upside risks. The possible depreciation of the dollar if the independence of the Fed is threatened. Thank you Mr. President for what you said about the independence of central banks. The possible depreciation of the dollar is one of these downside risks. We will therefore remain pragmatic and agile in each of the upcoming meetings of the Board of Governors.
Furthermore, economic activity in France continues to demonstrate a certain resilience. Our latest monthly business survey was published last night. She confirms that GDP would increase by at least 0.2%, I emphasize the least that we introduced in the 4th quarter of last year. Growth should therefore reach at least 0.9% in 2025 before settling, which is our forecast that we confirm, at 1% in 2026. So, the explanations for this persistent positive surprise, the credit, it must be said very clearly, goes to the courage of entrepreneurs and the work of the French. Incidentally, this work, measured in number of hours worked, remains at a record level.
I would like to point out that the French economy is also helped by certain sustainable advantages. The relatively high weight of services, industrial specialization in aeronautics and defense, and our more limited exposure to the American market compared to Germany or Italy. However, national political uncertainty is costing us, and our estimate is that it is costing us slightly more than zero points of GDP. I would like to point out, Mr. President, with regard to the question you asked about the economic effects of the budget, that we now believe the two effects offset each other. If there were less budget consolidation, there would be a traditional kinesiological effect of stimulation. But conversely, we increase uncertainty, and uncertainty, as we know, weighs negatively on household consumption and business investment.
For the moment, moreover, we note that it is more through household consumption that this channel of budgetary uncertainty weighs on the economy. And this brings me to the topic of saving. Regarding regulated savings, firstly, I will propose tomorrow to the Minister of Finance a rate of the savings account which will remain significantly higher than inflation and a marked advantage for the popular savings account which I would like to emphasize is the truly most advantageous popular savings product. Overall, savings must be at the right level. However, the current uncertainty is maintaining a still very high savings rate. The latest figure we have is for the 3rd quarter of 2025 at 18.4%. That's still 3 points above the pre-COVID level.
But above all, there are qualitative considerations. Savings need to be better allocated towards the proper financing of our economy. To put it another way, France does not lack credit, it lacks equity, just like the European economy. If I look at credit, mortgage lending has picked up again. This is good news from last year. Up 35% new loans and we are seeing good momentum in business investment lending. We are up over 4% in the share price for the past year. But France, and more broadly the eurozone, lacks equity and venture capital, which are essential for companies to innovate. Equity financing of companies represents only 85% of GDP in the euro area compared to more than double 220% in the United States. This transatlantic divide is not often highlighted. I think it's key to our innovation lag.
So, this brings me to the European dimension to conclude. More than 25 years ago, Europe built and conquered its monetary sovereignty with the tremendous success of the euro, an economic and political success that is now supported by 76% of the French. The time has come to face the American challenge of a new leap of sovereignty, this time economic and financial. So, Europe has what I would call a virtuous square of resources for this. I quote it very quickly: abundant private savings, as I've already mentioned, a very large domestic market on par with the American market, an exceptional talent pool and a rich pool of businesses. We must now leverage these strengths to revive Europe economically. And here, I can only regret that it did not take place in 2025.
So, the Drag reports and the State clearly tell us the way and around three imperatives which I will summarize in 3, firstly, to integrate more into the single market with in particular the creation of a 28th optional scheme by 2028. This 28th scheme in 2028 seems to me to be a friend of memory. This 28th regime could reduce the administrative burden on companies engaged in cross-border activities and decrease the cost of failure. 2nd: Invest better. There was an action plan from March 2025, specified in December by the European Commission on what is called the Savings and Investment Union, which we have often talked about here. I believe this plan needs to be further prioritized and accelerated towards financing through equity and European venture capital.
3rd, after integrating more, investing better, innovating faster. This applies particularly to currency and payments. And since this topic is very topical, I'll just say a word about it. Let us dare to innovate among Europeans, let us innovate in public-private partnerships to adapt our monetary sovereignty to the rise of tokenization. So, pardon the barbaric and somewhat jargon-like word. We will probably come back to this. It corresponds to a technological advancement which is the use of blockchain. So, I just want to distinguish between financial and interbank transactions. Then there are the wholesale transactions. 2026 will see the first wholesale central bank digital currency and I hope there too will be a partnership with the private sector for the first tokenized commercial currencies in euros, either in the form of tokenized bank deposits or in the form of stablecoins.
Obviously, what is attracting more attention is the general public; it will be the digital euro with the desired green light from the European Parliament in May, following the very welcome one from the Ecofine Council last December. Public level this digital euro but also combined with one or more private payment schemes like wero. I believe, and I'm summarizing this very briefly, that we will probably return to this winning public-private partnership in Europe rather than to a Euro-European war that would only produce American winners. I emphasize this point.
I will conclude, if you will, by inviting us at the beginning of this year full of uncertainty with the poet René Char. I quoted Senator Poincaré, but allow me to quote a poet from the south after a statesman from the east. René Char invites us, I find the expression lovely, to blow on a few glimmers to make good light. So, I hope that we can free ourselves a little from two obsessions that I believe are equally deadly: our Franco-French quarrels and the new American administration. Our economic destiny is first and foremost in our own hands; if we so choose, we can count on the Bank of France and the CPR to be committed to this and to be at your disposal. Thank you for your attention.
Thank you Mr. Governor, Mr. General Rapporteur, Mr. Governor, Mr. President, my dear colleagues, first of all, Mr. Governor, in a personal capacity of course, but also in your responsibilities, a good year, I would say a promising year and I wish it for our country full of success. You have just quoted, first of all I thank you for quoting Senator Poincaré who in his time was a Lorrain, therefore like you and me. That I continue to plant the territorial flag, it feels good because it is a territory which has unfortunately known difficult times and which paid heavily for the conflicts of the 20th century both in the flesh of these men but also in the nourishing land.
I want to, I'm going to jump in if you don't mind, just on your quote from René Char. Well, I'm willing to listen, and as you said, it's the time for wishes, to find, by blowing on a few glimmers, the right light. But I must tell you, and you have also reminded me, that I despair that France is still in this poorly lit budgetary tunnel which ends up clouding not only the landscapes but also minds, and I hope that we can do it collectively, that we get out of it quickly and successfully by achieving the objectives that many invoke, how should I say, with words, but which we have trouble translating into figures.
And you have repeatedly alerted public opinion, as you have just mentioned, to the urgency of correcting the accounts, particularly in the recent context of a forecast by the French Treasury agency, recalling and you also mentioned the risk of a rise in 10-year bond rates. We will just reiterate that in relation to this alert, a one-point increase in the interest rate should it occur. One point more in interest rates, as Alain Berruyer de Montgolfier already said, means around 32 billion in additional debt burden in 2035. So that much less financial resources, and you said it for our major priorities which have also evolved in recent times. I want to specifically mention here the change in our international landscape in terms of geopolitical tension which leads us to produce a defence effort that we have not produced more than in over 3 decades. And that now is not the time to let our guard down and not be vigilant. History, in my opinion, is quite enlightening on the subject, and for my part, I say it, you also just reminded us that we had become the worst borrower in the Eurozone. Personally, I don't really like donkey breasts. I don't really like hats in general, whatever the color, and I like the donkey-shaped hat even less, especially when it's France that wears it.
I repeat, we have rather in any case the majority here and I personally judge a little harshly the current inability, I will say of the power to take its responsibilities to propose savings and especially to fit these proposals into how shall I say into an institutional and especially constitutional mechanism. I think we've wasted a lot of time. I fear, moreover, that whatever the outcome now, which is said to be quick, if it is to do in January what could have been done in December, let's agree that it is regrettable and that it creates real unnecessary tensions, tensions in the country, but also in view of a context which is, as you mentioned, the risks to the sustainability of the public debt because my fear is that all this will end up with more taxes, more public and social spending and therefore more deficit and more debt. If this is the way to go, I think you'll agree with me that this isn't the best path.
So, more or less enlightened. I wanted to come back to this later by asking you a question about what we call the policy mix of recent years, which seems balanced but which, in my opinion, masks, how should I say, a crossover of the respective contributions of fiscal and monetary policy, since fiscal policy has, let's say, supported growth, even if it wasn't very strong due to the slippage in public accounts in 2024. It became more restrictive in 2025 and should normally be even more so in 2026. But the easing of monetary policy until 2025 is still having its effects and, it seems to have a favorable impact on activity in 2026? You mentioned this, but is this also your interpretation of the dependence of French growth on this monetary easing? And should we not fear for economic activity after 26, given that fiscal consolidation will have to continue even when monetary easing has exhausted its effects? You mentioned it earlier, I listened to you, I even noted what you called pragmatism and agility in this matter.
Finally, I would like to hear your thoughts on a point that I believe you have also mentioned. I'm going to go on a theme that overlaps with the topic of the beginning of this year where we finally have a very aggressive attitude from the United States on the international stage. The President of the United States even going so far as to threaten the territorial integrity of the European Union, which is a new and considerable fact that should not, in my opinion, be underestimated. The United States has a near-monopoly on our payment systems, whether it be Visa, Mastercard, Apple Pay, these financial infrastructures which in the shadows allow us to hold and participate in an essential way in the functioning of the economy. If by chance there were, how should I say, a challenge to this power by the United States, wouldn't that risk putting a, how should I say, cost on our economy? Don't you think that Europe is well prepared and even ready to face an attack, and therefore I can't say that it would be friendly in the face of hostility from the United States? I have just heard what you call a public-private solution, which is a solution that seems to me to be a little new. Fortunately, we still have a French and European payment method that exists, but which may not be threatened today, or at least may not be strong enough to fight. Could you give us your perspective on this subject?
Thank you, Mr. General Rapporteur. Mr. Governor, if you would be so kind as to answer first the questions of the general rapporteur and then we have, I believe, 8 to 10 colleagues who will question you.
Thank you, Mr. General Rapporteur. I'll try to be quick. First of all, thank you for mentioning Lorraine's shared loyalty, but it's a genre I won't abuse because the president sometimes thinks we do a bit too much. I was saying to Senator Cé, I have a Breton mother and I rejoice in the beauty of all our territories. I also agree with what you said about the red lantern and bonnets, whatever the symbol. I'll put it very directly. I think that the fact that France has now reached parity, or even fallen slightly behind Italy in terms of signatures, is still a signal that should have alerted us even more. And I, for one, refuse to accept the idea that this position of last place or Bonedane is sustainable. I believe we can do what is necessary to regain our financial standing and perhaps consequently our political influence in Europe.
I will simply return quickly to two important questions that you have raised. The question of the policy mix and the contribution of fiscal and monetary policy. First of all, I completely agree with your description of the recent policy mix. We had a bit of budget tightening in France, let's be honest, a bit, and we had monetary easing on the other side, since we brought rates down from 4% to 2% at a good pace, which was justified by our victory against inflation. I want to reiterate with some force because I sometimes read with a bit of surprise, especially in France, that our monetary policy is too restrictive or more restrictive than that of the United States. It's exactly the opposite. We have interest rates that are almost half as low as in the United States and are what specialists call the neutral rate, whereas they are significantly higher than the neutral rate in the United States. And if we look at the purchases of government securities, the famous quantitative easing, I'll give you some figures that may be less well known: the government securities that are still on the Fed's balance sheet today represent 14% of the US GDP. Government securities are on the balance sheet of our Eurosystem, including the Bank of France, they represent 22% of European GDP, so 50% more. So, we'll see with the famous agile pragmatism if there's still room for improvement in the future. It will depend on the levels of inflation.
But for the future, I believe that the French growth driver, the question you asked, is primarily on the side of confidence and reforms, and these are significant drivers. If we can restore confidence in the sustainability of the debt, in France's budgetary trajectory, as I said, that represents at least 2 points of growth. And if, at the same time, we mobilize the assets we have in Europe according to the three I's I mentioned, in particular the famous savings and investment union, that too is progress for growth not only in France but in Europe. What will help us a little is the German fiscal stimulus, since they, having managed their public finances much more wisely, can now make a large investment in defense. But perhaps I will summarize this with a consideration that is rarely discussed but which I believe is absolutely key to potential growth. Potential growth. Economists argue and debate its level. But basically, this is the cruising speed of the economy once you put aside cyclical variations. The summary here is very simple. The potential growth in Europe and in France at the beginning of this century, 25, 26 years ago, was around 2%. Today, it is about 1%. There is a very significant slowdown which we see pretty much everywhere, but which is also related to demographics. I believe we can bring French potential growth back to 1.5 through a number of French and European reforms.
Regarding the very aggressive attitude of the US, I can unfortunately only agree with you. I note in passing, I didn't say it in my initial statement, that we also have Chinese commercial aggression which is our other subject and that we have to deal with both. But it is true that in the field of payments and technology, our American dependence can pose a particular question. It is essential to have European sovereignty over payments and I believe that this conditions the continuation of our monetary sovereignty built with the euro. The solution, and we will undoubtedly come back to this in relation to certain questions, but I believe that we need a public floor, a public anchor. Money has always been everywhere for centuries; it's a public-private partnership. So we need a public digital currency, the famous digital euro for the general public, what we call wholesale digital currency for financial transactions, and for that we need European payment solutions. That's why I fully support what is called, what used to be called, EPI, which is only a partial solution today because it only includes 6 countries. Obviously, we need to target at least the 21 countries of the euro zone. But there is a complementarity between the two, between this public anchor and the digital euro and the private solution which is wero. I'm concerned about this because I periodically read things about the opposition. I think it's a false opposition that would make the American rentiers you talked about happy, or tomorrow, stablecoins in dollars. I just note in passing that in relation to this, this is the solution for tomorrow and we are working very actively on it, and I believe that it is something that is not long-term but short- to medium-term, I just note in passing that our country is among those that are a little less dependent on the large American schemes that you talked about, since we are fortunate to have the bank card group and for all French-French transactions this group is overwhelmingly dominant at over 80%, it is not always very well known. I say it again, when we have a choice as consumers, let's always try to favour the choice via the internet and all the bank card solution because it is a sovereign French solution, but we must have the same sovereign European solution when we make cross-border purchases. Perhaps I should stop there.
Thank you. So, Antoine Lefèvre's intervention was followed by Thierry Cic. Well, we've talked a lot about the United States, and just now, in my capacity as president of the France-United States group here in the Senate, I'd like to address the situation, particularly regarding the US Federal Reserve, since following the pressure exerted by the President of the United States on the Governor of the Federal Reserve, Jerome Powell, what is your feeling about the future of the independence of the American central bank? Should the global economy expect to be permanently destabilized by the prospect of monetary authority being subordinated to political power?
Thank you, Antoine. Thierry Cic, Michel Canv. Thank you, Mr. President. Governor, I listened to you with interest. I also listened to the comments you made on France Inter a few days ago and I have the feeling that all the features of the 2008 situation are present today. When we look at the financial side, there are stock market valuation levels that are unrelated to the economic environment. As a reminder, the New York Stock Exchange today has a market capitalization that is double that of the country's production. We have bubbles that are very inflated concerning technological activities that have not yet benefited from a strong, very favorable bias. And on the side of official finance which goes through banks and financial companies which are more or less controlled, there is a new circuit of private business loans without any control of soundness. Here too, on this point, we have managed to do worse than before 2008. As you will have understood, the risks are increasing in finance. Public debt, particularly American debt, is a cause for concern. In particular, interconnections have increased between banks, non-bank actors and the state. The problems of one will drag others into a crisis with non-linear effects. A small, poorly oriented variation in one of the parameters could generate large losses for one or the other. At the end of November, you stated that the European regulatory framework is dense and sometimes too dense. And you added, but no, the solution cannot lie in deregulation because let's not forget 2008 too quickly. So my question is quite simple. Given the gathering storm clouds, do you think the public authorities are taking stock of the potential crisis that awaits us?
Thank you, Thierry. Michel Canv then Marc Laménie. Thank you, Mr. President. Thank you also, Mr. Governor. We always appreciate your analyses, especially at the beginning of this year, to better understand what is going to happen. I was unable to attend your New Year's greetings ceremony on Monday, I was held up at the ministry, but I saw that you said there that wisdom lies in stopping playing with taxes. And it so happens that we have had many debates here with totally different views, between those who always wanted more taxes in order to generate much more public spending. That's what I observed. And then those who wanted lower taxes. Can you tell us more precisely what you meant to say on Monday during your New Year's greetings with, what I just quoted? You also just mentioned in your opening remarks the need to integrate a little more into the European Union, but we still see a lot of distrust towards the European Union. The Mercosur dossier illustrates this and shows the state of mind of public opinion in our country. Can we really move towards greater European integration when we see what is happening with Mercosur? When we see that, with regard to European funds, there is also what can be considered over-administration, can we reasonably make progress on the subject? You also, Mr. Governor, raised the issue of the Eurodigital. Indeed, I believe we need to focus on this because the valuation of crypto-assets in the world today is in the order of 4 trillion dollars. Therefore, Europe cannot remain aloof from all of this, which is dominated today essentially by two American players. How do you see the capacity to develop the euro? It is true that some banks have apprehensions about this. What obstacles have you identified to its deployment today? And then last subject, Mr. Governor, which is a subject close to my heart, which concerns access to mortgage credit, you have just mentioned the 35% increase in mortgage loan distribution, but we still have the feeling that there is a major housing problem that persists in our country. This is probably due to rules that are still too strict regarding access to pre-real estate. How can we make things more flexible so that the extremely high savings rate you mentioned in your remarks can be transformed into an investment that meets the housing needs of our citizens without costing the State anything? On the contrary, it can bring resources to the state. But I feel that today access to credit is too constrained by the rules that the Financial Stability Board has established, and therefore this needs to be relaxed. Thank you.
Thank you, Michel. Marc Laménie Vincent de Laée. Thank you Mr. President, Mr. General Rapporteur. Thank you very much Governor for this annual meeting. So I'm going to make a front page, as is my tradition every year. I often discuss staffing levels and human resources in our territories, both in mainland France and overseas. It's true that, for example in the Ardennes department, the staff is small, but they are highly qualified, and they organize local presentations, including one for the director and his deputy, aimed at decision-makers and then a few elected officials, to truly understand what the Bank of France does, because it's often misunderstood or poorly understood, and this close connection is important. So, I know that the Ardennes has links with the Marne, which is certainly a leading department, but in the short term are you maintaining staff on our territories, both in metropolitan France and overseas? That was my first question about staffing levels, about everything that is being done on the ground. And then my second question, the debt commissions, how do they work? There must certainly be significant disparities from one territory to another, and what is the share of activity? There you go, thank you very much.
Thank you, Marc. Vincent de Laée Jean-raymond Hugon. Thank you Mr. President, Mr. Governor, thank you for your presentation. Well, I'm always a little disappointed that when we talk about growth, we don't break down that growth into what is related to public administrations and what is related to business activity. Because I think you have the means to do it and it will be interesting to have it, and in recent years I think the public administration component has been quite dominant in French growth. And when we look at it, you talk about stabilizing public spending, others talk about controlling public spending. In reality, there is always an increase in public spending. If we look at 2025, there is a 50 billion increase in public spending. That's almost 3%. You mentioned 0.7% inflation, 0.9% growth, that doesn't add up to 3% growth in public spending. So do you think we can continue for a long time to have public spending increasing significantly more than inflation and growth? And I, for one, am in favor of reducing public spending. So, I would like that in the context when you issue a growth rate, you can break it down into public administration growth and the rest. And here, it's more of an observation about uncertainty. You put it at 0.2, I don't know how you can put uncertainty at 0.2, what I observe is that in Spain, they haven't had a budget for 3 years, they have at least the same uncertainty as us and it's going much better. So, are economic actors really that concerned about uncertainty, or are we overestimating it? And I think what we should do is change our budgetary policy from the one that has been pursued for the last 40 years and that we unfortunately continue to pursue.
Thank you, Vincent. Jean-Raymond Vincent Capocanela. Thank you, Mr. President. Mr. Governor, my question relates to the Euronumerical system on which you have insisted. You emphasized innovation, what you called the public-private partnership. As it happens, at the beginning of the year, a significant number of economists in Europe published an open letter to support the introduction of this digital euro. But there is a small flat or a sharp, I'll let you choose whether it's an augmented or diminished chord. He still believes that European parliamentarians are much more influenced by private banks on this issue compared to civil society actors. We know that the European Parliament is the world of lobbying, but there you have it. What do you think of this statement? And do you think it's the same in France? Thank you.
Thank you Jean-Raymond, Vincent Capocanela Christian Klinger. Thank you, Mr. President. Thank you, Mr. Governor. You have said many, many things, particularly about the estimated growth level this year, well, last year sorry, and this year. Three questions about Germany. You mentioned the positive effect of the expected fiscal stimulus. There is also a debt effect. Can we characterize the effect for France? Because the German fiscal stimulus is positive but on the market on the financial markets indeed and then for the level the cost of our debt, German debt if implemented as announced may have a negative effect. Secondly, regarding the resilience of the French economy, how would you describe the situation? I agree with what Vincent de Laée said somewhere. It is a form of vitality, yes, relative, but indeed, given the level of post-Covid budgetary spending, isn't this level of growth ultimately expensive or weak? Third point: you highlighted the lack of equity, the need for investment, the need for innovation; what would be the way to achieve this, in your opinion?
Thank you, Vincent Christian Klinger and then Vermeiller. Thank you, Mr. President. A question this time, Mr. Governor, to the regulator that you are as chairman of the prudential control and resolution authority, regarding the effects of unconventional policies on financial stability. The ECB is currently continuing to reduce its balance sheet by halting APP reinvestments. So this is the asset purchase program since mid-2023 and PEPP reinvestments. So, the emergency purchase program since the end of 2024. Doesn't this reduction of the central bank's balance sheet pose a risk to the stability of our financial system, the stability of our banking sector, and even more so when we know the exposure of our banks to public debt and vice versa for our public finances?
Thank you, Christian. Sylvie Vermeiller then Christine Lavarde. Thank you Mr. President and thank you Mr. Governor for your presentation. I would like to know, within the Eurozone, how you analyze the dynamism of Spanish economic growth with this almost 3% for 2025. As Vincent said earlier, it is a country which has not voted on a budget for 3 years, which laments a lack of a real majority. And it also seems to me that the interest rate on credit in Spain is higher than in France. So what is your interpretation of this 2.9% growth figure in Spain? Thank you.
Thank you, Sylvie. Christine Lavarde then Stéphane Sotarel. Yes, thank you. So, two questions about the challenges of green finance or financing the green economy. The first concerns the difference in structural financing that exists between companies developing so-called low-carbon technologies, which ultimately often need to resort to the financial market to develop. Whereas tech companies, which have an older business model, not to mention those that exploit oil resources, manage to finance themselves through their own cash flow. And so we understand that the former are much more exposed to the rebound of monetary policy, especially when it becomes restrictive. There is also a study from the University of Maastricht which showed that in fact as soon as the central bank starts to raise its rates, we observe a decrease in projects in the field of renewable energies. So ultimately, how will the European Central Bank manage to reconcile these economic stability objectives with the energy sovereignty objectives championed by the Commission? That was the first topic. And the second one, which relates more specifically to green interest rates. In 2026, the Central Bank will have to prepare the launch of its future structural refinancing operations, an operation which it had announced in 2024 and promising in particular that these operations will take into account the objectives of these secondary objectives, in particular climate change. So today, what is the position of the Bank of France on how these structural refinancing operations can effectively and efficiently support green growth, the green transition?
Thank you Christine Stéphane Sotarel, Claude Nouailhac. Yes, thank you Mr. President, Mr. Governor. My question concerns an innovation that has already been
Mentioned and is very present in our economy: artificial intelligence. Last December, Christine Lagarde stated, and I quote, that among the elements that surprised us on the upside, we note that it is mainly investments which for the private sector are largely attributable to the development of AI. A few weeks ago, the Rexeconé Institute published a graph showing that US growth excluding technology investment was only 0.1% of GDP in the first half of 2025. So, quite naturally, fears of an AI bubble bursting, similar to the dot-com bubble of the early 2000s, have emerged. Mr. Governor, in your view, is there an AI bubble? And if so, should we fear its imminent collapse? And how can we prevent it? Thanks.
Thank you Stéphane Claude Nougein. I am Emmanuel Capu.
