Letter to the President of the Republic – France and Europe: from crisis management to a longer-term ambition

21 April 2024
Banque de France - Philippe Jolivel

By François Villeroy de Galhau, Governor of the Banque de France

This Letter comes at a special moment: 25 years of Monetary Union and the European elections this year. Furthermore, we are gradually emerging from the inflationary crisis that has affected our economies and fellow citizens since the Russian invasion of Ukraine, and we are again faced with the fundamental challenges of European growth.

Firstly, this is an opportunity to shed some light on the reasons behind the recent successes in curbing inflation, which has already come down to 2.4% in March, both in France and the euro area. The reversal of the initial supply shocks, affecting energy and food prices, has naturally helped a great deal. But monetary policy has also played a significant part, by limiting the spread to core inflation, excluding energy and food, which has fallen to 2.9% in the euro area and 2.2% in France, half the peak reached a year ago. [...]