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The View From Paris · Trumponomics

• 0:03
  Speaker 1: Hello, and welcome to Stephanomics, the podcast that brings the
• 0:06
  Speaker 1: global economy to you. Talking of the global economy, I
• 0:15
  Speaker 1: wonder have you thought much about France recently. I met
• 0:19
  Speaker 1: the last time you really paid it any attention was
• 0:22
  Speaker 1: about the second half of last year. Watching pictures of
• 0:25
  Speaker 1: angry French people in high vis jackets. There's Le Jeune
• 0:28
  Speaker 1: rioting on the streets and generally causing trouble for President
• 0:32
  Speaker 1: Emmanuel Macon. His pole ratings collapsed and many decided that lomacronism.
• 0:39
  Speaker 1: He ended up giving in to some of the Jean's requests,
• 0:42
  Speaker 1: including an extra ten billion euros worth of targeted tax cuts.
• 0:46
  Speaker 1: Nice for the recipients, but not a great result for
• 0:49
  Speaker 1: the Western leader who was supposed to be turning the
• 0:52
  Speaker 1: tide against populism. But that was then. This week, the
• 0:56
  Speaker 1: French had been hosting the G seven meeting of finance
• 0:59
  Speaker 1: ministers and sent for bank governors, and you have to
• 1:01
  Speaker 1: say that France and the French economy are looking better
• 1:04
  Speaker 1: than most. I went to Paris beginning of this week
• 1:08
  Speaker 1: to find out more. In this episode, we're going to
• 1:10
  Speaker 1: play you two interviews from that trip. The first with
• 1:13
  Speaker 1: the French Finance minister himself, Bruno Lemaire, and the second
• 1:17
  Speaker 1: with Laurens Boone, the extremely smart chief economist of the
• 1:21
  Speaker 1: O E c D now Monsieur le Maire is known
• 1:25
  Speaker 1: for being a mischievous finance minister. He sometimes likes to
• 1:28
  Speaker 1: make a splash. I think when I spoke to him
• 1:31
  Speaker 1: in his grand office at the French Treasury, he didn't
• 1:33
  Speaker 1: want to make many waves with the G seven coming
• 1:36
  Speaker 1: to town. But see for yourself. Listen to first the
• 1:39
  Speaker 1: edited interview with him, and then hang on for a
• 1:42
  Speaker 1: more candid take on France and the state of economics
• 1:45
  Speaker 1: from Laurens Boone. I wanted to talk about President Macron
• 1:55
  Speaker 1: and where he stands in the global stage. When he
• 1:58
  Speaker 1: became president, he did seem to be in confronting one
• 2:02
  Speaker 1: of the big challenges that people face, populism. He was
• 2:06
  Speaker 1: going to be a role model for for the free
• 2:08
  Speaker 1: world in showing us how to defeat populism. If you
• 2:13
  Speaker 1: were looking at the last year or so, you'd say, well,
• 2:15
  Speaker 1: the lesson of the example that MCCA is setting is
• 2:19
  Speaker 1: you need to give in to the populace. And then
• 2:21
  Speaker 1: you do find is that is that the lesson of
• 2:24
  Speaker 1: the response to the yellow vests last year. I think
• 2:30
  Speaker 1: that the right response to the yellow jackets movement is
• 2:36
  Speaker 1: to take into account the difficulties that many people, either
• 2:43
  Speaker 1: in France or in any upan country are facing. The
• 2:48
  Speaker 1: rise of inequalities among developed countries is a key issue.
• 2:54
  Speaker 1: The differences between the highest wages and the other wages
• 2:59
  Speaker 1: is a key difficulty. The fact that some of the people,
• 3:04
  Speaker 1: either in France or once again in any other country,
• 3:08
  Speaker 1: are not able to leave from their earning is a
• 3:12
  Speaker 1: key question. And I think that the yellow jacket movement
• 3:16
  Speaker 1: is not only a French movement, but it's also the
• 3:20
  Speaker 1: evidence that varies a problem with the capitalism as it stands.
• 3:26
  Speaker 1: We need to improve capitalism, and I think that the
• 3:30
  Speaker 1: fact that we have decided to stick to the path
• 3:33
  Speaker 1: of reforms by taking or shoe into accounts the requirements
• 3:38
  Speaker 1: of all the people that are asking for more fairness,
• 3:42
  Speaker 1: for more justice, is the best way of dealing with
• 3:46
  Speaker 1: that issue. They took their concerns to the streets, including
• 3:49
  Speaker 1: with violence, and the response of the government was to give.
• 3:53
  Speaker 1: In was to give. I would not say that we
• 3:57
  Speaker 1: are not giving to a violence. We are against any
• 4:00
  Speaker 1: kind of violence, of course, but even if the movement
• 4:06
  Speaker 1: of the Yellow Jackets has transformed at the end into
• 4:10
  Speaker 1: a violent demonstrations and violent including attacks against the policeman
• 4:21
  Speaker 1: and story stores on the streets and so on. I
• 4:28
  Speaker 1: think that we should not undermine what is behind the
• 4:33
  Speaker 1: yellow jacket movement. Behind the yellow jackets movements, there are
• 4:38
  Speaker 1: men and women that are not living distantly from their
• 4:42
  Speaker 1: jobs and from their earnings, and they are just asking
• 4:46
  Speaker 1: for a kind of distancing. They want to have a
• 4:50
  Speaker 1: decent life, they want to leave from their jobs, and
• 4:54
  Speaker 1: all our policy is trying to give a concrete response
• 4:59
  Speaker 1: to that fair requirement. We want work to pay and
• 5:04
  Speaker 1: that's it' that's at the heart of our economic policy
• 5:08
  Speaker 1: and in pushing your version of the right economic model,
• 5:14
  Speaker 1: the French economic model and what they believe Europe should
• 5:17
  Speaker 1: look like. Is it going to be easier if and
• 5:20
  Speaker 1: when you can ever get rid of the UK, if
• 5:22
  Speaker 1: the UK finally does achieve brexit. No, I really think
• 5:28
  Speaker 1: that the fight, that the fact that the UK is
• 5:33
  Speaker 1: leaving the EU is a pity and I'm sad about that.
• 5:38
  Speaker 1: Frankie speaking, Francis says hosting this G seven, and it
• 5:50
  Speaker 1: looks like luck is on on France's side. At the moment.
• 5:53
  Speaker 1: There are things that have been failures in the past,
• 5:55
  Speaker 1: like failures to to boost exports significantly over the years,
• 6:01
  Speaker 1: a failure to reign in borrowing in debt, and now
• 6:04
  Speaker 1: if we look this year, both of those things look
• 6:07
  Speaker 1: like strengths. Frances is less exposed to the trade wars
• 6:10
  Speaker 1: and actually has loosened fiscal policy potentially, just as other
• 6:14
  Speaker 1: people are starting to say their economies need a bit
• 6:17
  Speaker 1: more support. So are you Are you a model for
• 6:20
  Speaker 1: the rest of the world or just very lucky. I
• 6:23
  Speaker 1: would not say that we are modeled, and they would
• 6:25
  Speaker 1: not say that we are lucky. I would just say
• 6:28
  Speaker 1: that we are strongly willing to improve the competitiveness of
• 6:33
  Speaker 1: the French economy. And I think that with em Macon
• 6:36
  Speaker 1: we have taken the right decisions. We have taken the
• 6:39
  Speaker 1: right decisions by transforming or taxation system, by improving or
• 6:48
  Speaker 1: laberal market, and by taking all the required decisions to
• 6:53
  Speaker 1: support or enterprises and samese. So I think with that
• 6:58
  Speaker 1: we're on the right track. We have very concrete results.
• 7:01
  Speaker 1: I mean, that's the level of growth easier satisfying one
• 7:05
  Speaker 1: even if we can do more, and that we can
• 7:08
  Speaker 1: improve that situation we are reducing the level of an
• 7:12
  Speaker 1: employment in France or we are on the right track,
• 7:15
  Speaker 1: but we are fully determined to stick to the path
• 7:19
  Speaker 1: of reforms for the sake of having better results. When
• 7:24
  Speaker 1: you think about the things you want to change, it
• 7:25
  Speaker 1: does look like the summit is going to be hijacked
• 7:28
  Speaker 1: by the big Internet companies. There's been much discussion around
• 7:32
  Speaker 1: from Donald Trump tweeting criticizing the French proposal for taxing
• 7:38
  Speaker 1: these big internet companies on their trade in the country.
• 7:43
  Speaker 1: But also you have talked about that the concerns around
• 7:46
  Speaker 1: Libra and the Facebook's proposed new currency. So do you
• 7:51
  Speaker 1: think that's going to end up dominating everything. I think
• 7:53
  Speaker 1: that's a key issue and it will dominate not only
• 7:56
  Speaker 1: the summer, but I think that all these issue of
• 8:01
  Speaker 1: the digital giants will dominate the economic debate for the
• 8:08
  Speaker 1: next decade. I think that's a key issue. And you
• 8:11
  Speaker 1: should also mention the fact that the US administration has
• 8:15
  Speaker 1: decided to impose a penalty of five billion dollars on Facebook,
• 8:23
  Speaker 1: which is a clear signal of the necessity of putting
• 8:27
  Speaker 1: more regulation among the Internet giants and the necessity to
• 8:32
  Speaker 1: build together a fair regulation for the Internet giants. Then
• 8:37
  Speaker 1: there is a question of the currency, the so called Libra,
• 8:41
  Speaker 1: the project from a Facebook. I think that we have
• 8:44
  Speaker 1: to be very cautious and we have to avoid this
• 8:48
  Speaker 1: proposal Libra becoming a kind of a sovereign currency. I
• 8:54
  Speaker 1: don't want a private company to take the whole of
• 8:58
  Speaker 1: a sovereign state and having the power of in storing
• 9:03
  Speaker 1: a sovereign currency. I think that it would be a
• 9:05
  Speaker 1: threat for the sovereignty of the states, and it would
• 9:10
  Speaker 1: not feed our idea of what a sovereign currency should be.
• 9:15
  Speaker 1: There's a lot of opposition to this proposal, but I
• 9:18
  Speaker 1: wonder in practice how easy is it going to be
• 9:21
  Speaker 1: to prevent Facebook from introducing this proposal. I mean, it's
• 9:25
  Speaker 1: one thing to set themselves up as a bank, but
• 9:28
  Speaker 1: having just a method of payment globally, arguably they already
• 9:31
  Speaker 1: have the capacity to do that. If it doesn't if
• 9:34
  Speaker 1: it is only a method of payment, fine, But if
• 9:37
  Speaker 1: that method of payment becomes a sovereign currency, it might
• 9:42
  Speaker 1: be a parliment. We also have to ensure to all
• 9:45
  Speaker 1: citizens that there is no problem with money lundering, for instance,
• 9:50
  Speaker 1: or the funding of terrorism. So we have to give
• 9:54
  Speaker 1: all the insurances to our citizen that this way of
• 10:00
  Speaker 1: exchanging goods is sticking to the same kind of commitments
• 10:05
  Speaker 1: that everybody is obliged to take. You could say this, actually,
• 10:09
  Speaker 1: even this opposition and debate shows how dominant these companies
• 10:15
  Speaker 1: have become in their influence on the discussions at global levels.
• 10:19
  Speaker 1: I mean, this is a G seven meeting of finance
• 10:21
  Speaker 1: ministers and one proposal by one company. It sounds like
• 10:26
  Speaker 1: it's going to take quite a big chunk of your discussions. Yes,
• 10:29
  Speaker 1: but you know it is not any company. It is
• 10:34
  Speaker 1: not the smallest company of the world, which is one
• 10:37
  Speaker 1: of the biggest company of the world. So I think
• 10:40
  Speaker 1: that it's our job to define the regulatory framework that
• 10:47
  Speaker 1: is necessary to avoid any risks linked to the creation
• 10:52
  Speaker 1: of such a libra. That's what we try and get
• 10:56
  Speaker 1: into the issues as well on the Stephanomics podcast. So
• 10:58
  Speaker 1: thank you very much. Thank you. So that was Bruno Lamaire,
• 11:09
  Speaker 1: the French finance Minister, speaking just before the G seven
• 11:12
  Speaker 1: meeting of finance ministers and central bank governors that he
• 11:15
  Speaker 1: was hosting in Chauntily in northern France. Now here's Lawrence Boon,
• 11:20
  Speaker 1: chief economist at the o e C. D. Laurence welcome
• 11:29
  Speaker 1: to stephanomics. UM. I was talking to the Finance Minister
• 11:34
  Speaker 1: Bruno Lamaire earlier. He's very focused on the G seven,
• 11:38
  Speaker 1: but I and he meant he said that he thought
• 11:41
  Speaker 1: maybe France was a model for other countries. I thought,
• 11:45
  Speaker 1: if they are a model, it's by luck. You know,
• 11:48
  Speaker 1: you've had years of not managing to really significantly increase
• 11:53
  Speaker 1: their net exports and their success in the global trading system,
• 11:57
  Speaker 1: not really getting on top of their debt, and they're
• 12:01
  Speaker 1: borrowing as abc D and others have often told them
• 12:04
  Speaker 1: to do, and most recently giving into the populist giving
• 12:09
  Speaker 1: them quite a lot of money to make them go away.
• 12:12
  Speaker 1: Do you think that is a model that the rest
• 12:14
  Speaker 1: of the world should follow. Ignored ignored the OCD advice
• 12:17
  Speaker 1: on lots of things, and you'll end up coming smelling
• 12:19
  Speaker 1: of roses. So there's one thing which I think is true, UM,
• 12:23
  Speaker 1: is that, as you were a leading to, France is
• 12:26
  Speaker 1: much less dependent on global trade and expots than many
• 12:29
  Speaker 1: other your area countries. Whereas you will see that in Germany,
• 12:35
  Speaker 1: for example, about twenty percent of the value edits coming
• 12:38
  Speaker 1: from manufacturing, in the frant sits on the ten percent.
• 12:42
  Speaker 1: So when the same as the UK, although the French
• 12:45
  Speaker 1: were always saying that they're much bigger manufacturing what they
• 12:50
  Speaker 1: have their own brands and your kay, it might not
• 12:53
  Speaker 1: be always the local brand, but so that's true. That's
• 12:57
  Speaker 1: when when the economy is going down because of a
• 13:00
  Speaker 1: contraction in trade or slow down in trade, and FRONTS
• 13:04
  Speaker 1: attempts to feel much less than the other. You saw
• 13:07
  Speaker 1: that in twenty or nine with the Big crisis, where
• 13:10
  Speaker 1: the decision was about half what it was in other countries.
• 13:13
  Speaker 1: But conversely, when the rest of the world is booming
• 13:16
  Speaker 1: on the back of expansion expansion every trade, then France
• 13:20
  Speaker 1: is going less fast all in normal Fronts comes as
• 13:26
  Speaker 1: a welfare farming country in twenty nineteen UM, but it's
• 13:30
  Speaker 1: still one in the quarter of GDP. Growth is you know,
• 13:35
  Speaker 1: not exactly a boom salm, but in France we like
• 13:39
  Speaker 1: to be put well, but it is striking in years
• 13:44
  Speaker 1: of people pointing to Frances. You know, now, I think
• 13:50
  Speaker 1: debt public debt ratios a share of the economy, the
• 13:55
  Speaker 1: very large share of government spending in the economy include
• 14:00
  Speaker 1: something like six if you're also including the industries that
• 14:03
  Speaker 1: are owned by that both the government, the o C
• 14:05
  Speaker 1: D and others have been telling France for years that
• 14:09
  Speaker 1: it ought to do more dramatic reform, that it was
• 14:12
  Speaker 1: stuck in the past, that it was going to face
• 14:14
  Speaker 1: and have to face the music at some point. It's
• 14:16
  Speaker 1: never really had to face the music. In fact, as
• 14:18
  Speaker 1: I say now, it seems to be doing quite nicely
• 14:21
  Speaker 1: relative so I think it had to face the music
• 14:25
  Speaker 1: in a sense with what happened in December, and then
• 14:28
  Speaker 1: that was quite a big wake up call about them French.
• 14:33
  Speaker 1: Of the social economic background in France. Um, it was
• 14:38
  Speaker 1: a big wake up call in terms of yes, fronts
• 14:41
  Speaker 1: is a highly redistributive country and you alluded to it.
• 14:44
  Speaker 1: Fifty seven percent of g D people expending is the
• 14:47
  Speaker 1: u c D record. But these massive redistributions actually not
• 14:53
  Speaker 1: enough to advise people concern and I think would happen
• 14:56
  Speaker 1: in December should really shed light on the structural issues
• 15:01
  Speaker 1: that FUNDS has, which is mostly a huge inequalities of opportunities. Um,
• 15:07
  Speaker 1: we've just published our flagship publication, Going for Growth, which
• 15:12
  Speaker 1: monitors reforms on product market, label market, and I think
• 15:19
  Speaker 1: we can barely say that there's still a lot to
• 15:22
  Speaker 1: do in Funcy. Even so I must say that that
• 15:25
  Speaker 1: reforms have been proceeding for the past few years, even
• 15:29
  Speaker 1: in sometimes in small steps, but where it's it's the
• 15:32
  Speaker 1: beginning of a journey. I have to say you mentioned
• 15:35
  Speaker 1: that report, um I have I've probably been doing this
• 15:38
  Speaker 1: job too long, but I've had a lot of read
• 15:40
  Speaker 1: a lot of similar reports from the cd UM and
• 15:43
  Speaker 1: which normal we publish it with. Yes, that's right and well,
• 15:48
  Speaker 1: but also in sort of other fields. And of course
• 15:50
  Speaker 1: you've not been a chief economist for for all of
• 15:53
  Speaker 1: that period. But I was sort of struck that the
• 15:56
  Speaker 1: description of the problem changes in these reports. So in
• 16:00
  Speaker 1: your you talk about the need to particularly the sort
• 16:05
  Speaker 1: of inclusive element. We need to raise opportunities for all
• 16:09
  Speaker 1: challenges of globalization, digitalization, aging, environment is more front and
• 16:15
  Speaker 1: center than it has been maybe in the past. But
• 16:18
  Speaker 1: the solutions that the o c D sees to all
• 16:20
  Speaker 1: these problems seem to be much similar to the ones
• 16:23
  Speaker 1: they saw before. And we always need to have structural
• 16:26
  Speaker 1: reform of product markets and labor markets. I mean, some
• 16:30
  Speaker 1: people would say it was doing some of those reforms
• 16:32
  Speaker 1: in some of these countries that cause the political backlashes
• 16:35
  Speaker 1: which governments are now dealing with. UM I think in
• 16:38
  Speaker 1: a sense some of what you say is is Some
• 16:40
  Speaker 1: of which you to is actually right. Um, if you
• 16:45
  Speaker 1: look at the headline of the reform we recommend, they
• 16:47
  Speaker 1: look pretty much the same. But when you look at
• 16:51
  Speaker 1: a more granula level and looking for in that's something
• 16:54
  Speaker 1: we want to do math, they've actually evolved quite significantly.
• 16:58
  Speaker 1: Let me take the example of the mean mum wage
• 17:01
  Speaker 1: um fifteen years ago, twenty years ago. I'm not'm sure
• 17:05
  Speaker 1: you were reading it already. Invite you know any farming
• 17:07
  Speaker 1: ly the O E c D would say minimum wage
• 17:10
  Speaker 1: bad for employment and label market. I think when you
• 17:13
  Speaker 1: look at what we do now, and it's visible in
• 17:15
  Speaker 1: going far ways other job strategy, we are much more
• 17:19
  Speaker 1: pre size and it deepens a lot more on the countries.
• 17:21
  Speaker 1: There's definitely been a change of attitude across the well
• 17:26
  Speaker 1: certainly across a lot of economics economists on the minimum wage.
• 17:30
  Speaker 1: But I was thinking, for example, of the sort of
• 17:32
  Speaker 1: structural reforms you talk about, reforms to boost competition in
• 17:35
  Speaker 1: markets for goods and surfaces, opening up markets to entry,
• 17:40
  Speaker 1: competition and foreign trade is essential for innovation. You have
• 17:44
  Speaker 1: all this stuff, but when you do that, I mean
• 17:47
  Speaker 1: the way that it changed. The way that it increases
• 17:49
  Speaker 1: innovation and increases efficiency is by forcing some companies to
• 17:53
  Speaker 1: close down and forcing some people out of work and
• 17:56
  Speaker 1: putting them into other things. And it's precisely that kind
• 17:59
  Speaker 1: of actual change that a lot of those yellow vests
• 18:03
  Speaker 1: would have been, at least at some level complaining about
• 18:06
  Speaker 1: they feel already that the economy has changed too much
• 18:09
  Speaker 1: and that their old lifestyle has been threatened. It's true.
• 18:14
  Speaker 1: So if let's look at it in sequence, higher competition
• 18:18
  Speaker 1: will boost innovation. There's there's a little doubt for that.
• 18:22
  Speaker 1: Now there are two consequences we should take into The
• 18:24
  Speaker 1: first one is higher competition and intellectual property right, and
• 18:29
  Speaker 1: never look at one policy in isolation. It's higher competition
• 18:34
  Speaker 1: and a regulatory regime for property right that will allow
• 18:38
  Speaker 1: the innovator to keep a bit of the rent of
• 18:41
  Speaker 1: the innovation it's making at the beginning, but not too long.
• 18:45
  Speaker 1: And if we look, for example, at the pharmaceutical industry,
• 18:48
  Speaker 1: those ones have probably been there too long, so then
• 18:51
  Speaker 1: they start inventing the welfare of people. So that's one change,
• 18:55
  Speaker 1: and the other is competition works when if you have
• 19:00
  Speaker 1: a label market where people who are displaced as you
• 19:04
  Speaker 1: highlight can be put back in another job of the
• 19:08
  Speaker 1: same level and quality of as what they were doing
• 19:11
  Speaker 1: fairly quickly um. And that's where I think we have evolved,
• 19:15
  Speaker 1: and actually all economies we should do a big meya coupa,
• 19:19
  Speaker 1: because we all talk about the benefit of trade for
• 19:22
  Speaker 1: everybody without looking and disaggregate. But that's changed a lot,
• 19:26
  Speaker 1: and we're doing quite a lot of work actually on
• 19:28
  Speaker 1: this to say it's there's no doubt competition openness is good,
• 19:33
  Speaker 1: but there's no doubt either that it's hurting some people.
• 19:37
  Speaker 1: And these people we need to take care of, especially
• 19:45
  Speaker 1: if we look at the very low level of interest
• 19:48
  Speaker 1: rates around the world and the fact that people expect
• 19:50
  Speaker 1: them to remain low for for long term structural reasons,
• 19:53
  Speaker 1: at least for a while. That has changed people's view
• 19:57
  Speaker 1: of what is a sustainable fiscal position for a government.
• 20:01
  Speaker 1: You know, if you've got if you're paying less for
• 20:02
  Speaker 1: your debt quite far into the future, you can probably
• 20:06
  Speaker 1: afford to have more of it. If you were writing
• 20:09
  Speaker 1: the convergence criteria or the fiscal rules for the European
• 20:13
  Speaker 1: mirror Zone now they would be very different when they
• 20:16
  Speaker 1: I mean even just in terms of what we think
• 20:18
  Speaker 1: as a high debt level or an unsustainable that level.
• 20:21
  Speaker 1: So I agree with you that it would likely be
• 20:24
  Speaker 1: different and at the very low rate for a long
• 20:26
  Speaker 1: time change things. At the same time, I think if
• 20:29
  Speaker 1: we're only here and off in this debate, is the
• 20:31
  Speaker 1: initial what the initial level of debt is for some
• 20:34
  Speaker 1: countries um, and some of them have very high debt
• 20:38
  Speaker 1: and some of them we we still am, I think rightly.
• 20:41
  Speaker 1: So we commented that they should actually be careful to
• 20:44
  Speaker 1: how much debt too. They've got just put it in conte. Sorry,
• 20:48
  Speaker 1: but just if you mentioned the Japan example, I mean
• 20:50
  Speaker 1: your Japan, it turns out now is have you know
• 20:52
  Speaker 1: well over two GDP debt. We've always had a sort
• 20:56
  Speaker 1: of thing in our mind that once you get into
• 20:58
  Speaker 1: three figures, once you get sort of hundred, that's when
• 21:02
  Speaker 1: things start to get beyond the pale. I mean, do
• 21:06
  Speaker 1: you think even that has changed if we're looking at
• 21:08
  Speaker 1: the Japan situation or not. So, I think Japan is
• 21:11
  Speaker 1: very specific, not only because that's cloth that if you
• 21:14
  Speaker 1: look at the two GP ratio, it's it's a lot lower. Also,
• 21:18
  Speaker 1: it's got a very spatial labor market where everybody is
• 21:22
  Speaker 1: employed even if you know they don't have a job
• 21:25
  Speaker 1: of the same intensity from one worker to another. The
• 21:28
  Speaker 1: coesion of the society is very different from what we
• 21:31
  Speaker 1: see in Europe. Um. The advantage or the comparative advantage
• 21:35
  Speaker 1: of your should be that there is a your area
• 21:39
  Speaker 1: which is hanging all these nation states together and means
• 21:42
  Speaker 1: that from a whenever one acts on a policy lever
• 21:48
  Speaker 1: then it has an impact throughout the regions and that
• 21:50
  Speaker 1: should minimize the positive or negative reform that anybody has
• 21:55
  Speaker 1: to do. And I think that's where governments need to
• 21:59
  Speaker 1: get back to discuss. It's in their common interest. What
• 22:03
  Speaker 1: surprised me talking to Bruno Lamire is there's going to
• 22:06
  Speaker 1: be a whole chunk of the G seven finance ministers
• 22:10
  Speaker 1: devoted to talking about just one company's proposal for a
• 22:14
  Speaker 1: digital currency or a new global currency. The liber Facebook
• 22:19
  Speaker 1: only produced this proposal a matter of weeks ago, and
• 22:24
  Speaker 1: yet you have some of the most important finance mesites
• 22:27
  Speaker 1: in the world spending quite a lot of their time
• 22:29
  Speaker 1: focus just on that. Are we getting to the point
• 22:32
  Speaker 1: where these companies are as important or more important than
• 22:36
  Speaker 1: some of those G seven countries. So I think there's
• 22:40
  Speaker 1: one valid comparison, which is in terms of the people
• 22:44
  Speaker 1: that that this company could be could be um, the
• 22:49
  Speaker 1: share of people are using this company's application, right, and
• 22:53
  Speaker 1: you have something Simili in China and that's also delivering
• 22:57
  Speaker 1: a payments esteem and so that can give an idea
• 23:00
  Speaker 1: about what that means. Now, a proper money, as you know,
• 23:05
  Speaker 1: has legal tender because it's backed by your state, which
• 23:09
  Speaker 1: wouldn't be the case here. But at the same time
• 23:13
  Speaker 1: it would affect quite enormous amount of people and it
• 23:18
  Speaker 1: would have to be linked to the payment system. Um.
• 23:22
  Speaker 1: So that's when it comes to Okay, if it's linked
• 23:24
  Speaker 1: to the pavement system, how can it affect it, how
• 23:27
  Speaker 1: can it affect other currency? What does that mean for
• 23:29
  Speaker 1: finance stability? And in that respect, I think it's a
• 23:34
  Speaker 1: it's not only normal, but it's for once. As you
• 23:37
  Speaker 1: were seeing earlier, it's very rapid the reaction of Finance Minister.
• 23:41
  Speaker 1: So it's great that they're talking about it, said the
• 23:43
  Speaker 1: G seven. Finally, you did mention this question of whether
• 23:48
  Speaker 1: we're responding fast enough to climate change and changing our
• 23:53
  Speaker 1: economy around to be I think it's probably a universal
• 23:56
  Speaker 1: agreement that we're not any of us responding quickly now.
• 24:00
  Speaker 1: But I wonder whether you've thought about we talked before
• 24:02
  Speaker 1: about the sort of reforms that have long been proposed
• 24:06
  Speaker 1: to O c D and having to go back and
• 24:07
  Speaker 1: maybe tweat them to make sure that they're not having
• 24:11
  Speaker 1: inequitable consequences, you know, to think about the political economy.
• 24:15
  Speaker 1: Are you also thinking about that for the environment, because
• 24:20
  Speaker 1: it struck me that a loss of I'm not sure
• 24:22
  Speaker 1: I know the answer to whether you know combating climate
• 24:25
  Speaker 1: change is going to be progressive or regressive for the
• 24:29
  Speaker 1: income scale, but I kind of I think it's sort
• 24:31
  Speaker 1: of important to know. Now you're absolutely right, So I
• 24:34
  Speaker 1: couldn't give you the reasons because we've actually launched this
• 24:38
  Speaker 1: a few at least on my side, a few weeks
• 24:40
  Speaker 1: and months ago. But what we're trying to do is
• 24:42
  Speaker 1: exactly that we have what type of investment, which investment
• 24:46
  Speaker 1: compared combined? So we with a carban tax, which one
• 24:50
  Speaker 1: we know this has implication and the delusion as are
• 24:53
  Speaker 1: here to remind us of that, and the speed of
• 24:56
  Speaker 1: the transition, how fast do we want to go? What
• 24:59
  Speaker 1: does it mean for people's job Because if you were
• 25:02
  Speaker 1: in a cool mind, you're not going to do the same. Oh,
• 25:04
  Speaker 1: in nuclear plant, it's not the same as working windmill.
• 25:07
  Speaker 1: How do you connect the energy that when you're able energy,
• 25:10
  Speaker 1: you're creating what implications for the territories that's and all
• 25:16
  Speaker 1: of them are going to be affected. So it's a
• 25:18
  Speaker 1: it's a massive work we've we've started and I'll give
• 25:21
  Speaker 1: you the answer next time we meet. Well, I'm but well,
• 25:23
  Speaker 1: that's very encouraging. I'll have to make an appointment soon
• 25:25
  Speaker 1: because I am glad to hear that. But I'm a
• 25:28
  Speaker 1: bit worried if you, with all with the greatest respect,
• 25:31
  Speaker 1: that the O c D is not always the fastest
• 25:33
  Speaker 1: to reach its conclusions on these grand questions. So keep putting,
• 25:39
  Speaker 1: will look forward to get the answer. But I think
• 25:41
  Speaker 1: it's something we're going to talk about more on this program.
• 25:43
  Speaker 1: Laurel Spoon, thanks very much for coming on. Thank you, Steffany.
• 25:56
  Speaker 1: That leaves so much to talk about on future podcast.
• 26:00
  Speaker 1: Thanks for listening to Stephanomics. We'll be back next week
• 26:03
  Speaker 1: for the last episode of the season. In the meantime,
• 26:06
  Speaker 1: you can find us on the Bloomberg Terminal website, app
• 26:09
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• 26:12
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• 26:14
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• 26:17
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• 26:21
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• 26:24
  Speaker 1: This episode was produced by Magnus Hendrickson, with special thanks
• 26:28
  Speaker 1: to William Horrobin in Paris, Bruno Mayor Laurels Boone and
• 26:32
  Speaker 1: Lawrence Spear of the O E. C. D Our. Executive
• 26:36
  Speaker 1: producer is Scott Lambman, and the head of Bloomberg Podcast
• 26:39
  Speaker 1: is Francesca Leaving