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To the Governor of the Banque de France's fundamental reforms undertaken by Greece will require eighteen months to take effect, requiring the donor countries to consider an extension of the duration of their funding. It demolishes the idea that to get out of Greece must leave the euro area.

LE FIGARO. – Is it realistic to think that Greece will really pay off debts?

Christian Noyer. – Absolutely. The effort to reduce deficits should be continued. The remediation plan is credible, it is the Greek government to find a balance between increased revenue and reduced spending. There is room for maneuver: to improve tax collection and initiate privatization, which is the quickest and least painful to reduce public debt.Last year, the government has cut the deficit to 5% of GDP which proves that it is possible with determination, to get quick results.

Is not it a shame that the plan agreed with the IMF and Europe is primarily financial and does not propose economic strategy for growth?

I disagree with this criticism. The expected reforms have two aims: improving the public accounts and strengthen the growth potential of the Greek economy, make it more competitive.

But it is impossible to rely on the devaluation of the currency. Is not that a handicap?

No, because you can get the same result by reducing production costs and nominal wages.On the surface this may seem obviously more complex than a depreciation of the exchange rate, but in reality, we avoid the perverse effects of the devaluation, which increases energy costs, the cost of raw materials and results in a higher cost of debt when it is denominated in foreign currencies. Overall, a modest reduction in income yields the same economic effects that a significant devaluation.

Why must now implement a second remediation plan, a year after that of summer 2010?

The original plan, decided in an emergency, assumed that in 2012 Greece back in the financial markets. It was clearly too optimistic. The fundamental reforms will require more than eighteen months to produce their effects and restore confidence.A three-year horizon seems justified, and that is the average duration of IMF programs.

The facts do not they give reason to Eurosceptics who the countries in the euro area are far too dissimilar to live with the same currency and the devaluation is the way?

Certainly not! Eurosceptics believe that the devaluation could make a country competitive and give sound public finances. Wrong. And the French experience has shown us. In thirty years, and many devaluations, we have never posted a budget surplus and so we were never able to reduce our debt stock! What brings the competitiveness, it is a sound public financial management, careful monitoring of production costs and structural reforms conducive to long-term growth.Moreover, being dissimilar in the same currency area is not necessarily a handicap, as shown in the American example. But it is clear that we were not vigilant enough about the differences in competitiveness, which have widened within the euro area. When a country has increased productivity by 1% to 2% per year and that his wages rise from 7% to 8% per annum, it is sure that it is untenable after ten years. As central bankers, we will be more critical and will not hesitate to publicly condemn such abuses.

A single currency and a market without trade barriers can they be sufficient to constitute an integrated market, while tax and social security are very different?

You're right, we must go further and further integration for a functioning monetary union. The European Commission is currently working.Similarly, we must return to a single banking market. Before the crisis, with the ECB, financial institutions in the euro area benefited from refinancing conditions identical, making a single market. But with the crisis and massive government intervention in favor of their banks, the markets viewed the bank credit ultimately depends on the state, rating agencies have correlated the ratings of banks with those of sovereign states in which they operate. It's a real problem.We must return to a single European banking market and create such a federal system that can manage the deposit guarantees and bank crises in Europe.

What do you think of the device proposed by the French banks?

This solution has the advantage of being on a voluntary basis – since it is the banks themselves who have proposed – and is attractive for all financial actors, pension funds and insurance … In particular, the formula provides investors with a guarantee of repayment of the principal holders can then consider that it's more interesting to come to a scheme such as staying with the debt they are today.It is a development that I welcome, though some technical issues remain to be resolved and accounting.

You yourself have referred to "horror scenario" …

Yes, because the restructuring would be a disastrous solution. Greek debt is owned primarily by the Greek economy, banks and pension funds … A Greek default on its debt immediately would mean serious problems for Greek banks. The state would then be forced to bail out its banking system. And overnight, no one would lend to Greece. The country would be forced to post a budget surplus, a surplus in its balance of payments in order to pay its civil servants, social security spending, etc.. Such a scenario would require an adjustment to ten times and with minimal delay.This is absolutely dramatic, hence the term "horror scenario".

We often speak of a "plan B" for Greece, in case it would be in default. What do you mean by this term?

There is no plan B. Greece must bring this plan to completion to find a healthy sustainable economy.

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