"La victoire contre l'inflation est acquise" affirme François Villeroy de Galhau

First, I want to say a word about the decision we made yesterday unanimously, which is to maintain interest rates at 2%. And to note that we are, to use Christine Lagarde's expression, in a good position because the victory against inflation is won. Inflation is slightly below 2% in the eurozone, and we might come back to that, it's even significantly lower in France. That has economic consequences. We are at only plus 0.4%. So yesterday we decided to maintain interest rates at 2%. I note that on the same day, the Bank of England met and also maintained its interest rate, but at 3.75%. So you see there is a level of interest rates that is more favorable in the eurozone than in England or the United States.

We discussed what we call risks in our language. There are upside risks to inflation. There are probably more significantly downside risks. We'll say a word about the exchange rate. We also talked a lot about the rise in Chinese imports. We might come back to the exchange rate. I will repeat what Christine said very clearly yesterday in her press conference. We do not have an exchange rate target. Things must be clear, but the exchange rate is very important for activity as well as for inflation. If the euro appreciates significantly further, that means less inflation. And so Christine Lagarde said, 'We keep a close eye.' We keep a very close eye on the evolution of the exchange rate. I believe that is perhaps an important signal. In our discussion, we also noted that it was not so much an appreciation of the euro as a general weakness of the dollar over the past year, which reflects a lack of confidence in American assets due to uncertainties in American policy, in American economic policy. Perhaps one last note. This movement on the dollar has tended to stabilize in recent days. We are around $1.18 for €1. I note, by the way, it's a coincidence that it's the historical parity when you look at the average euro-dollar since the creation of the euro.

It's very important to clarify what our mandate is. Our mandate is 2% inflation. And that, in a world where everything moves, where everything is uncertain, is extremely important for our citizens, for businesses, to be able to rely on the value of money and price stability. So, the phenomena you just cited, we look at them first in terms of their consequences on inflation. We are close to 2%. We are slightly below 2% in the eurozone at 1.7%. By the way, I come back to French inflation because we perhaps haven't commented enough on it. There are two indices, unfortunately. There is a national index at 3% and the European index gives 4%. But that doesn't make a big difference, it's still very low and lower than other countries. It's lower than other countries. You are absolutely right. And that has two rather positive consequences for France. The first is that it means purchasing power, and the second is that this lower inflation can be accompanied by wage moderation, and that is good for our competitiveness. There is a figure I want to give this morning, which is that since 2019, since Covid, France has regained 10% competitiveness compared to Germany and 6% compared to all our European partners. What we measure by what we call unit labor costs is the evolution of wages weighted by the evolution of productivity. So that is a good thing for French competitiveness. Now, there is a less good thing for the competitiveness of all of Europe, which is indeed Chinese imports.

No, we are close to 2%. We look at eurozone inflation, but there are upside risks. We are monitoring a number of downside risks. We talked about the exchange rate. I will come back to Chinese imports, which is a subject we also discussed yesterday and the day before. We see a fairly strong increase in Chinese imports recently, partly due to the closure of the American market for Chinese exporters. Here are two figures that are quite striking. When we look at the last 6 months of 2025 and compare them to the last 6 months of 2024, in one year, Chinese imports into the eurozone increased by more than 11% in volume, in quantity, and they decreased by more than 10% in price. When you combine the two, it has a fairly strong disinflationary effect. I believe we need to strengthen the European economy, European growth, we will talk about it, but we are closely monitoring the evolution of China.