Latest / Stephanomics / Finance Minister Le Maire Explains the French Economic Comeback

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Finance Minister Le Maire Explains the French Economic Comeback · Stephanomics

• 0:03
  Speaker 1: Hello, and welcome to Stephanomics, the podcast that brings the
• 0:06
  Speaker 1: global economy to you. O Macron is super contagious. Any
• 0:09
  Speaker 1: primary school teacher can tell you that. But it's not
• 0:12
  Speaker 1: as lethal as previous rounds of this virus, so surely
• 0:15
  Speaker 1: it's going to be a lot less damaging to the recovery.
• 0:18
  Speaker 1: Only you don't need to be in lockdown for a
• 0:20
  Speaker 1: significant chunk of the economy to grind to a halt.
• 0:24
  Speaker 1: You just need one in four workers to call in sick.
• 0:27
  Speaker 1: Today's show we Haven't on the ground report from Bloomberg
• 0:31
  Speaker 1: senior correspondent Shawn Donnan on the tidal wave of sick
• 0:34
  Speaker 1: days that's hitting the supply of mozzarella sticks, airline pilots,
• 0:39
  Speaker 1: and yoga pats. We also take some time to consider
• 0:42
  Speaker 1: President Emmanuel Makhorn, labeled the anti Trump when he swept
• 0:46
  Speaker 1: to power in France nearly five years ago. Now looking
• 0:49
  Speaker 1: a bit battle weary as he fights for reelection, but
• 0:52
  Speaker 1: things are going surprisingly well for the French economy. I
• 0:56
  Speaker 1: have a conversation with the French finance Minister, Bruno Lemaire
• 0:59
  Speaker 1: in a few minutes. Hang on for that, but first,
• 1:09
  Speaker 1: for much of this pandemic It's fair to say that
• 1:12
  Speaker 1: governments have had more than a little control over both
• 1:15
  Speaker 1: the economic accelerator and of course the breaks. But with
• 1:20
  Speaker 1: the O Macron variant running rampant in many major economies,
• 1:24
  Speaker 1: we're seeing a new factor that governments seem to have
• 1:26
  Speaker 1: a lot less control overcome into play. Workers calling in sick.
• 1:35
  Speaker 1: It's hard to overstate how fast the O Macron virus
• 1:38
  Speaker 1: has hit the United States. It took the US ten
• 1:41
  Speaker 1: months to register its first ten million cases. In the
• 1:45
  Speaker 1: last ten million cases, which in early January took the
• 1:48
  Speaker 1: US through the sixty million case mark, have come in
• 1:51
  Speaker 1: less than a month. That speed has had consequences for
• 1:55
  Speaker 1: businesses that have been very different than what they saw
• 1:58
  Speaker 1: at other times in the pen demic. Here's James Bill,
• 2:02
  Speaker 1: the CEO of Leto Pizza, a chain that has a
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  Speaker 1: hundred and ten locations in the Washington, d c. Area.
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  Speaker 1: Now it's almost kind of like we're resetting the clock again.
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  Speaker 1: Our our new normal is becoming another new normal. It
• 2:13
  Speaker 1: seems like it's also not just the pizza chains workers
• 2:17
  Speaker 1: calling in sick. Beal says he's been dealing with another
• 2:20
  Speaker 1: round of problems with his suppliers, their staff, problems have
• 2:24
  Speaker 1: seen them reduce production shifts and delivery routes. To put
• 2:28
  Speaker 1: that in real world restaurant menu terms, that means he
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  Speaker 1: can't get as many mozzarella sticks as he would like,
• 2:34
  Speaker 1: and it takes longer to get them. It's happening pre Amicron,
• 2:37
  Speaker 1: but his has gotten Deviline has got worse. Tell me,
• 2:44
  Speaker 1: tell me how how you guys have been hit by,
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  Speaker 1: particularly this latest wave here. I think this latest wave
• 2:50
  Speaker 1: is just I think hit A lot of people are
• 2:52
  Speaker 1: sort of on certainty. I think that's the biggest Jim Robertson,
• 2:56
  Speaker 1: who with a partner owns and operates five Leado franchises
• 2:59
  Speaker 1: and the DC area sas. So far, the supply chain
• 3:03
  Speaker 1: problems haven't hit the pizzas, although a few times recently
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  Speaker 1: he has had to make the two hour there and
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  Speaker 1: back drive to a Virginia warehouse to pick up pizza
• 3:10
  Speaker 1: boxes that haven't arrived in time from suppliers like in
• 3:14
  Speaker 1: boxes one day, and then you're trying to find containers
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  Speaker 1: for the wings the next day, and then if you're
• 3:20
  Speaker 1: out of moth through all the sticks. So it's just
• 3:22
  Speaker 1: but I guess I think understand it. And so as
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  Speaker 1: long as you explain things to people, I think you're okay.
• 3:27
  Speaker 1: It's just the core items. You get nervous. You don't
• 3:29
  Speaker 1: want to run out of anything we do to make
• 3:32
  Speaker 1: the pizza right. You know, It's one thing if you're
• 3:34
  Speaker 1: out a moth through all the sticks and you won't
• 3:35
  Speaker 1: hear me company. But if I'm at a you know,
• 3:38
  Speaker 1: you know, making be not being able to make the
• 3:40
  Speaker 1: pizza sauce or being able to make dough, then you've
• 3:42
  Speaker 1: got a big problem. The problem for the US economy is,
• 3:47
  Speaker 1: of course, that it's not just a problem affecting the
• 3:51
  Speaker 1: supply of deep fried cheese. What started as a series
• 3:55
  Speaker 1: of holiday flight cancelations as pilots and other staff fell
• 3:59
  Speaker 1: ill or were forced into quarantine, it's rapidly becoming a
• 4:03
  Speaker 1: business reality, and factories, hospitals, grocery stores, and at those
• 4:07
  Speaker 1: ports where the container bottlenecks were building up last year.
• 4:11
  Speaker 1: Even if the hit is temporary, as most anticipate, the
• 4:15
  Speaker 1: disruptions enclosures are likely to slow the fragile rebound in
• 4:19
  Speaker 1: some sectors and way on businesses plans for the future.
• 4:24
  Speaker 1: Nick Bunker, an economist at job Site, indeed, grew up
• 4:27
  Speaker 1: in Massachusetts and there everyone remembers the Great Blizzard of
• 4:31
  Speaker 1: seventy eight, which dumped as much as four ft of
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  Speaker 1: snow on parts of New England inside thirty six hours
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  Speaker 1: in February. It paralyzed the region for weeks. It was
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  Speaker 1: a major economic hit in the short term, which is
• 4:45
  Speaker 1: what he thinks oh maicron will do. Only it has
• 4:48
  Speaker 1: quickly become a national event, which means for now thinking
• 4:52
  Speaker 1: about the economic impact as the mother of all winter storms,
• 4:58
  Speaker 1: this big we a very large, sharp shock to the
• 5:02
  Speaker 1: economy in the lade market specifically. But the hope is,
• 5:06
  Speaker 1: like a storm, it ends and then there's return to
• 5:11
  Speaker 1: prior trends. The impact may also be partly hidden in
• 5:17
  Speaker 1: the data. Of course. The monthly job numbers in the
• 5:20
  Speaker 1: US and elsewhere are really best at estimating who has
• 5:24
  Speaker 1: been fired or hired in any given month. They're not
• 5:26
  Speaker 1: as good at telling the story of lost economic output
• 5:29
  Speaker 1: due to people calling in sick. And yet there's clearly
• 5:35
  Speaker 1: evidence of exactly that. Alaska Airlines has already canceled ten
• 5:39
  Speaker 1: percent of its flights in the month of January, citing
• 5:43
  Speaker 1: an unprecedented number of staff calling in sick. Lulu Lemon,
• 5:47
  Speaker 1: the leisureware company, warned this week that it had been
• 5:49
  Speaker 1: forced to reduce operating hours that its stores because of
• 5:52
  Speaker 1: lack of staff, which means fewer yoga pants sold and
• 5:56
  Speaker 1: lower profits. In California, out breaks of hit luxury retailers
• 6:01
  Speaker 1: on Rodeo Drive. Supermarkets are blaming oh Macron Absences for
• 6:05
  Speaker 1: contributing to shortages of everything from chicken breasts to organic tofu.
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  Speaker 1: They've also hit the ports, which is daunting for anyone
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  Speaker 1: who was paying attention to the supply chain crisis we
• 6:16
  Speaker 1: all lived and breathed last year. Jim McKenna is president
• 6:19
  Speaker 1: of the Pacific Maritime Association. They negotiate labor agreements for
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  Speaker 1: seventy companies at twenty nine ports on the West coast
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  Speaker 1: of the United States. Well, we've seen over the last
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  Speaker 1: couple of weeks is the virus go from two to
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  Speaker 1: three a day to twenty a day, and now we're
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  Speaker 1: doing over a hundred positive tests per day, and in fact,
• 6:41
  Speaker 1: on Wednesday we had a hundred and sixty longshoreman test positive.
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  Speaker 1: There is good news, of course, when workers do have
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  Speaker 1: to stay homesick, they often aren't out for as long
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  Speaker 1: as they were with other variants, especially if they are vaccinated.
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  Speaker 1: Jim Robertson's Leado franchises haven't been hit hard yet. He
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  Speaker 1: had three employees at one store test positive, but he's
• 7:02
  Speaker 1: been able to keep running. And while there weren't many
• 7:05
  Speaker 1: people eating lunch in the dining room of one of
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  Speaker 1: his stores on a visit earlier this week, it wasn't
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  Speaker 1: entirely dead. Is it changing how you're thinking about the
• 7:13
  Speaker 1: business or what your strategy at all, or how your
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  Speaker 1: protecting or do you think they're going to go back
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  Speaker 1: to a world where I'm We've got people here eat
• 7:20
  Speaker 1: much right now. But yeah, but so when we would
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  Speaker 1: normally have this restaurant would be full in old days
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  Speaker 1: at on a even on a Tuesday, and at mean
• 7:30
  Speaker 1: would at least be three quarters getting ready to fill
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  Speaker 1: up because it's a small dining room. But you definitely
• 7:37
  Speaker 1: have rethought on a monthly basis what you're gonna do
• 7:41
  Speaker 1: to generate more carry out business, how to make it
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  Speaker 1: more efficient. You know, we now have curb side. We
• 7:47
  Speaker 1: used to not have. We have um you know, during
• 7:50
  Speaker 1: the height of the COVID we would you know, we
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  Speaker 1: had it all carry out at that point. We found
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  Speaker 1: ways to streamline things, open a door to make guests
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  Speaker 1: for it feel more comfortable. It's really just how we
• 8:01
  Speaker 1: make our guests experience the best that can beat through this.
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  Speaker 1: Back in the kitchen, there were Manzelli sticks going in
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  Speaker 1: the deep fryer next to a cauldron of mariniri sauce.
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  Speaker 1: All of the staff were masked, but they were there
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  Speaker 1: and working, even if one of the printers that buzzed
• 8:15
  Speaker 1: into action every so often was playing up, which is
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  Speaker 1: emblematic of a broader story of adaptation. Lito Pizza was
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  Speaker 1: facing staff shortages before oh Macron. The company now employs
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  Speaker 1: fewer people than it did before the pandemic. To adapt,
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  Speaker 1: Beale says they have quietly cut the choices customers have
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  Speaker 1: for their pizzas. They've also dropped complicated pasta items from
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  Speaker 1: the menu to take some of the pressure off kitchen staff.
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  Speaker 1: So as to planning ahead, and one thing we try
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  Speaker 1: to do is embrace the technology to see where we
• 8:47
  Speaker 1: can reduce pain points as far as the labor So
• 8:52
  Speaker 1: prior to COVID, we did three percent online ordering, a
• 8:56
  Speaker 1: digital ordering. Now we're up to about thirty digital lording.
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  Speaker 1: So that actually and that's in a you know, eighteen
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  Speaker 1: month time frame, so that actually enables us to do
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  Speaker 1: a greater volume with loss people. In economic terms, that
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  Speaker 1: of course means they're increasing productivity. That's good for business,
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  Speaker 1: but that doesn't diminish the hit. The virus is the economy,
• 9:19
  Speaker 1: and he keeps finding ways to surprise us, which is
• 9:22
  Speaker 1: why millions of us are calling in sick for Bloomberg News.
• 9:28
  Speaker 1: I'm Sean Donnon now France and the story of Emmanuel
• 9:41
  Speaker 1: Macorn when he came out of nowhere to win the
• 9:44
  Speaker 1: presidency in seventeen, just a few months after President Trump
• 9:48
  Speaker 1: entered the Oval office, mcral was dubbed the great Liberal Hope,
• 9:52
  Speaker 1: a supporter of multinationalism, rules, liberal values, free markets, everything
• 9:58
  Speaker 1: you might say the President Trump was not. He was
• 10:01
  Speaker 1: going to transform the French economy, lead the European Union
• 10:04
  Speaker 1: to bigger and better things, oh and fixed climate change.
• 10:08
  Speaker 1: Now it's five years on and he's facing the fight
• 10:11
  Speaker 1: of his life to be re elected in April against
• 10:14
  Speaker 1: some right wing opponents who are forcing him onto difficult
• 10:17
  Speaker 1: political territory. But he does have one ace up his
• 10:21
  Speaker 1: sleeve that eluded past French presidents, a strong economy. In
• 10:25
  Speaker 1: a minute, We're very lucky to have a chat with
• 10:28
  Speaker 1: the French finance minister Bruno Amaire. But first a few
• 10:32
  Speaker 1: words with our France economy reporter Will Horribon. Will thanks
• 10:36
  Speaker 1: very much, and I should thank you for for helping
• 10:38
  Speaker 1: us get that interview with Bruno Lemaire. Just get us
• 10:43
  Speaker 1: up to speed. For those who haven't been watching the
• 10:46
  Speaker 1: twists and turns of the French presidential election, where do
• 10:49
  Speaker 1: we stand? Well? In some ways the French presidential election
• 10:52
  Speaker 1: hasn't really got going yet because COVID is very much
• 10:55
  Speaker 1: gone in the God in the way. But what we
• 10:58
  Speaker 1: see happening is the Macron is he has still has
• 11:02
  Speaker 1: quite a lead in the polls um and the people
• 11:05
  Speaker 1: who are close closest behind him are those to the
• 11:09
  Speaker 1: right of where he's set himself out. Now. The way
• 11:15
  Speaker 1: the French elections works, important to have a reminder is
• 11:18
  Speaker 1: it's a two round process, so that two candidates who
• 11:20
  Speaker 1: get the most votes in the first round go to
• 11:22
  Speaker 1: a second round run off. So most poles are showing
• 11:25
  Speaker 1: now that Macron will go to a run off against
• 11:28
  Speaker 1: one of one of three candidates from his right, and
• 11:32
  Speaker 1: and those are There's there's Barry Press, who's a sort
• 11:35
  Speaker 1: of center right candidate from Lepic party. There is his perennial,
• 11:42
  Speaker 1: the perennial nationalist candidate in French elections, Marine Lapin Lpin
• 11:47
  Speaker 1: is always a surname of the perennials, the surname here,
• 11:52
  Speaker 1: but this would be if if she went to the
• 11:54
  Speaker 1: run off, that would be a repeat of twenty seventeen
• 11:56
  Speaker 1: for Macron as well. And then there is a new
• 11:59
  Speaker 1: far Candida as well, who's a sort of former polemicist, journalist,
• 12:04
  Speaker 1: commentator Eric m. And you you mentioned that it does
• 12:10
  Speaker 1: introduce this kind of interesting dynamic, the fact that you
• 12:12
  Speaker 1: have the two rounds. So so where do the polls stand. Well,
• 12:17
  Speaker 1: Macron does have quite a good lead, and you know
• 12:19
  Speaker 1: he's around let's say, in the first round, and then
• 12:24
  Speaker 1: the three other candidates are often around neck and neck,
• 12:28
  Speaker 1: about seven or eight points behind him. So it seems
• 12:32
  Speaker 1: quite clear that he will at the moment, if you
• 12:34
  Speaker 1: if the polls are correct, that he will get to
• 12:36
  Speaker 1: the second round relatively easily, and then he will have
• 12:39
  Speaker 1: to in the second round. It's very different if he
• 12:42
  Speaker 1: faces valet becles from the center right who perhaps have
• 12:46
  Speaker 1: similar economic program to him, or whether he faces one
• 12:49
  Speaker 1: of the more controversial candidates in Marine le Pen. Thinking
• 12:55
  Speaker 1: about that second round. You know, it's all very well
• 12:57
  Speaker 1: if you if you win the first round, but if
• 13:00
  Speaker 1: all of the right candidates together add up to considerably
• 13:04
  Speaker 1: more at the moment, considerably more than you know, you
• 13:09
  Speaker 1: have a bit more of a risk if you have
• 13:10
  Speaker 1: a candidate that's going to unite all of those all
• 13:13
  Speaker 1: of those voters. So what's the what's the prospects for that? Again,
• 13:17
  Speaker 1: it depends who it is. I think you know that
• 13:21
  Speaker 1: some people who voted for Zamore could vote for say
• 13:25
  Speaker 1: l Pen in the second round. Some people who voted
• 13:28
  Speaker 1: for the Pen in the second round in first round
• 13:31
  Speaker 1: could vote for in the second or even the other
• 13:34
  Speaker 1: way around. It's very hard to predict that at the moment.
• 13:37
  Speaker 1: And another big important factor in this is absenteerism. Will
• 13:43
  Speaker 1: will people not actually just not bother voting in the
• 13:45
  Speaker 1: second round? Um, And that makes it very hard to
• 13:48
  Speaker 1: predict as well. We've said at the start that the
• 13:51
  Speaker 1: economy is quite strong, and we gather you've written that
• 13:56
  Speaker 1: his advisers are saying, you know, don't necessary you know,
• 14:00
  Speaker 1: don't spend all this time talking about immigrants and and
• 14:03
  Speaker 1: other difficult issues. You know, go to your strong suit,
• 14:05
  Speaker 1: which is the economy is that put at risk by
• 14:09
  Speaker 1: by Omicron or does he is that a really strong
• 14:12
  Speaker 1: card for him. It could be a strong card depending
• 14:17
  Speaker 1: on the timing. Right now, the French economy has recovered
• 14:20
  Speaker 1: very well from the pandemic um and sort of noticeably
• 14:25
  Speaker 1: better than some of its European peers, and so that
• 14:28
  Speaker 1: is definitely an asset for him if that continues in
• 14:32
  Speaker 1: the next couple of months. Um there are some very
• 14:36
  Speaker 1: strong employment numbers that I think not even not even
• 14:40
  Speaker 1: his team expected to see at the end of by
• 14:43
  Speaker 1: the end of this year. And also, as we talked
• 14:46
  Speaker 1: about in the story that we've written, the so he
• 14:49
  Speaker 1: can point to some of the early reforms that you've
• 14:52
  Speaker 1: mentioned in in your introduction as being part of the
• 14:55
  Speaker 1: reason why some of these some of these positive economic
• 14:58
  Speaker 1: results are coming through now. Um. So, depending how he
• 15:02
  Speaker 1: plays it, and if if the pandemic comes off the
• 15:06
  Speaker 1: boil to a stain extent in the next few weeks,
• 15:08
  Speaker 1: then it could be the card that could be very
• 15:12
  Speaker 1: useful for him going into this election. Well, thanks to
• 15:16
  Speaker 1: you and your excellent contacts at the French Finance Ministry,
• 15:20
  Speaker 1: we can hear a lot more about that now in
• 15:23
  Speaker 1: my conversation I had with the Finance Mr Puno Lamaire.
• 15:26
  Speaker 1: But thanks very much, well, thank you Stephanie. We're delighted
• 15:35
  Speaker 1: to have the French Finance Ministra back with us. Welcome
• 15:38
  Speaker 1: back to Stephanomics, Ms leminist Thank you. We obviously are
• 15:42
  Speaker 1: many people listening to this podcast are in America and
• 15:45
  Speaker 1: in other places, and many of the stories we see
• 15:47
  Speaker 1: coming out of France in the run up to this
• 15:49
  Speaker 1: presidential election have been about immigration, security and of course
• 15:54
  Speaker 1: the pandemic. But President Macon came to office five years
• 15:58
  Speaker 1: ago on a platform of nomic change. We were going
• 16:01
  Speaker 1: to see a wave of supply side reforms that would
• 16:05
  Speaker 1: end decades of relative economic decline for France. So do
• 16:10
  Speaker 1: you think that macronomics has succeeded? What's happened to that agenda?
• 16:14
  Speaker 1: I think that maccon has been successful in restoring the
• 16:20
  Speaker 1: French economy and in making the French economy more competitive.
• 16:26
  Speaker 1: And the promise that he made in twenty seventeen was
• 16:29
  Speaker 1: to introduce a total of the whole of the French
• 16:32
  Speaker 1: taxasion system, of the French competitiveness for the sake of
• 16:37
  Speaker 1: having more jobs and more growth. And here we are.
• 16:42
  Speaker 1: We have more growth with the level of six goals
• 16:46
  Speaker 1: for one, and we have restored the pre crisis activity
• 16:52
  Speaker 1: level no later than November of last year. And as
• 16:57
  Speaker 1: far as employment is concerned, we have the highest employment
• 17:01
  Speaker 1: rate in fifty years, sixty seven point five for the
• 17:06
  Speaker 1: fifteen to sixty or four years old. So I really
• 17:09
  Speaker 1: want to in see on the fact that the economic
• 17:14
  Speaker 1: policies that have been introduced by Quison backron is a success,
• 17:19
  Speaker 1: success for France and a success for the French people.
• 17:23
  Speaker 1: You're right that employment is stronger than it has been
• 17:26
  Speaker 1: in a while, but unemployment still much higher than in Germany.
• 17:30
  Speaker 1: And if you look at the forecast of our economists
• 17:33
  Speaker 1: of other economists, they don't seem to expect higher long
• 17:37
  Speaker 1: term growth rates in France as a result of any
• 17:41
  Speaker 1: of these policies. So so in that sense, macronomics has
• 17:44
  Speaker 1: does not seem to have had an impact. Now I
• 17:48
  Speaker 1: show your point of your the necessity to reinforce those results,
• 17:52
  Speaker 1: but I would like to underline that we have a
• 17:56
  Speaker 1: very sound and solid basis to reinforce the French economy
• 18:03
  Speaker 1: and to make better over the next years. The level
• 18:07
  Speaker 1: of corporate stacks was thirty three point three in twenty
• 18:11
  Speaker 1: seventeen and we reduce that level to twent for all
• 18:16
  Speaker 1: companies in tw two. We also have very positive results
• 18:22
  Speaker 1: on the creation of private companies and on the scalp
• 18:27
  Speaker 1: of our startups. So I think that there is a
• 18:29
  Speaker 1: need to continue reducing the level of taxation on private companies.
• 18:35
  Speaker 1: I think that we have to reduce the level of
• 18:38
  Speaker 1: social charges on the highest wages if we want to
• 18:42
  Speaker 1: be more competitive for the technological industries. And we also
• 18:47
  Speaker 1: have to think about the best way of improving the
• 18:51
  Speaker 1: skills of the French workers. But my point is we
• 18:56
  Speaker 1: are on the right track. We did the necessary reforms.
• 19:00
  Speaker 1: There is a need to do more, there is a
• 19:02
  Speaker 1: need to do better, but we are on the right
• 19:05
  Speaker 1: track by improving the French offer, which was to meet
• 19:09
  Speaker 1: the key point in the French echomy. You have talked
• 19:13
  Speaker 1: about the energy price rise that the whole of Europe
• 19:16
  Speaker 1: is seeing as an absolute emergency. Clearly it's a massive
• 19:20
  Speaker 1: issue in the UK and other places. Households are bracing
• 19:24
  Speaker 1: themselves for maybe fifty increases in their energy bills in
• 19:27
  Speaker 1: April in the UK. France has made this what's from
• 19:31
  Speaker 1: the outside an extraordinary commitment to cap the impact on
• 19:36
  Speaker 1: households this year to only a four percent rise. You're
• 19:39
  Speaker 1: the finance Mr. Can you really afford that to write
• 19:43
  Speaker 1: that blank check to French households and who's who's going
• 19:45
  Speaker 1: to pay for it? In the end, It's an absolute
• 19:48
  Speaker 1: necessity and I think that we would have to share
• 19:52
  Speaker 1: the cost of course between the French state and we
• 19:55
  Speaker 1: are already being eight billion yours to reduce the level
• 19:59
  Speaker 1: of the energy prices, the electricity prices for both the
• 20:04
  Speaker 1: households and the private companies, and we will need to
• 20:08
  Speaker 1: do more because increase on energy prices. The increase on
• 20:11
  Speaker 1: electricity prices might reach thirty five to for the year
• 20:19
  Speaker 1: twenty twenty two. So there is an absolute necessity to
• 20:23
  Speaker 1: intervene if we do not want to have very strong
• 20:27
  Speaker 1: difficulties for the households and a threat on the private companies,
• 20:32
  Speaker 1: especially on the industrial companies. So we have decided first
• 20:37
  Speaker 1: of all to reduce the level of taxation on electricity prices.
• 20:42
  Speaker 1: This is the first response that we have given with
• 20:47
  Speaker 1: the Prime Minister to the increase on electricity prices. But
• 20:51
  Speaker 1: it won't be enough. So we are working very closely
• 20:55
  Speaker 1: with a d F electricity refunds to try to build
• 20:59
  Speaker 1: a second response. We will which will complement the first
• 21:03
  Speaker 1: one and which will allow us to stick to the
• 21:06
  Speaker 1: promise given by present Macon to cap the executive prices
• 21:11
  Speaker 1: to four in twenty two. I hope that we would
• 21:14
  Speaker 1: find the response, that we would be able to proposal
• 21:17
  Speaker 1: response no lager than the end of this week. And
• 21:21
  Speaker 1: do you see that as an economic necessity or a
• 21:24
  Speaker 1: political necessity? Because I look around Europe and there's the
• 21:28
  Speaker 1: same kind of energy price prices coming down the track
• 21:30
  Speaker 1: for many governments, and no government, no other major government,
• 21:35
  Speaker 1: is offering this kind of support, but they're not just
• 21:37
  Speaker 1: about to face a presidential election. This, first of all,
• 21:40
  Speaker 1: in economic necessity because it is less costly to protect
• 21:45
  Speaker 1: the industrial plans from this huge increase of the executive prices,
• 21:52
  Speaker 1: rather than providing help to the salaries, providing help to
• 21:58
  Speaker 1: those companies because they are threatened by possibly shut down.
• 22:03
  Speaker 1: I really think that this is the right response, the
• 22:07
  Speaker 1: right economic response to this electricity crisis. I also want
• 22:13
  Speaker 1: to insist on the necessity to have a long term approach,
• 22:16
  Speaker 1: which won't be enough to have a protection given by
• 22:18
  Speaker 1: boast of French state and by a deaf We also
• 22:21
  Speaker 1: need to have a long term response based on changes
• 22:25
  Speaker 1: in the electricity market, the European electricity market, because I
• 22:30
  Speaker 1: think that they need for changes in the European electricity market.
• 22:35
  Speaker 1: It will be also the core of the French EU presidency.
• 22:39
  Speaker 1: What is your advice to to other governments who are
• 22:42
  Speaker 1: all dealing with the same issue and they can also
• 22:44
  Speaker 1: see what the potential cost could be of putting the
• 22:49
  Speaker 1: bill for these energy price rises. I think that may
• 22:51
  Speaker 1: be why they are willing to have households really shoulder
• 22:55
  Speaker 1: the burden over the next year. What do you think
• 22:58
  Speaker 1: of the risk of that you let households face this
• 23:01
  Speaker 1: kind of maybe thirty forty increase in their energy bills.
• 23:06
  Speaker 1: First of all, I really think that there is no
• 23:10
  Speaker 1: possibility for our people to have such an increase in
• 23:16
  Speaker 1: their electricity bills thirty when the average electricity bill in
• 23:23
  Speaker 1: France is around nine euros. That's something that the all
• 23:31
  Speaker 1: the people cannot afford, and that's why there is a
• 23:34
  Speaker 1: need for a strong response. Then I really think that
• 23:38
  Speaker 1: the single, fair and efficient response over the long term
• 23:43
  Speaker 1: is based on one single word. Independence. We need to
• 23:48
  Speaker 1: be more independent on the production of energy. We need
• 23:53
  Speaker 1: to reduce the level of dependency on gas production by
• 23:58
  Speaker 1: Russia and by other foreign states, which means that we
• 24:01
  Speaker 1: have to build both new nuclear plants. That's the response
• 24:07
  Speaker 1: that we wanted to give. We put on back home
• 24:09
  Speaker 1: to the risk of these increasing energy prices, and we
• 24:14
  Speaker 1: also have to rely on renewable energies. But the real
• 24:19
  Speaker 1: response is to have more independence on the energy production
• 24:24
  Speaker 1: everywhere in Europe. Do you think as we look at
• 24:29
  Speaker 1: the fallout, the longer term fallout from the pandemic, the
• 24:33
  Speaker 1: one that is most obvious clearly is inflation, and not
• 24:37
  Speaker 1: just energy prices, but inflation that's come from supply chain
• 24:41
  Speaker 1: issues and potentially also the labor market being quite tight
• 24:45
  Speaker 1: in many places, people changing their attitude to work in
• 24:49
  Speaker 1: some countries. Do you think inflation could end up as
• 24:52
  Speaker 1: a greater political risk to governments than the pandemic itself.
• 24:58
  Speaker 1: We have to be vigilant. We have to understand what
• 25:04
  Speaker 1: is behind this increase on prices, and I think that
• 25:08
  Speaker 1: what is behind and what explains half of the increase
• 25:11
  Speaker 1: of prices is the energy prices, and that's why the
• 25:15
  Speaker 1: long term response must be based on more independence on
• 25:19
  Speaker 1: energy production, and then we need to be very careful,
• 25:23
  Speaker 1: very vigilant on inflation or assessment remains that this level
• 25:30
  Speaker 1: of inflation remains a temporary inflation. But let's be very clear.
• 25:35
  Speaker 1: When I'm speaking about temporary inflation, I'm not speaking about days.
• 25:40
  Speaker 1: I'm not speaking about weeks. I'm speaking about months. And
• 25:46
  Speaker 1: I think that we would have to leave with a
• 25:49
  Speaker 1: pretty high level of inflation by the end of twenty
• 25:52
  Speaker 1: twenty two, because of the lack of energy, because of
• 25:56
  Speaker 1: the difficulties in the supply chains, because of the situation
• 26:01
  Speaker 1: in China, which has decided to close its borders. For
• 26:06
  Speaker 1: all these reasons, I think that we would have to
• 26:08
  Speaker 1: leave with a pretty high level of inflation by the
• 26:11
  Speaker 1: end of twenty twenty two. So this is a temporary inflation.
• 26:15
  Speaker 1: But we have to understand that the word temporary means
• 26:21
  Speaker 1: some month and not some weeks. We have different definitions
• 26:26
  Speaker 1: of transient in the US, and people are certainly changing
• 26:29
  Speaker 1: their view of that. If we step back a little bit,
• 26:32
  Speaker 1: you will remember, you will certainly know five years ago,
• 26:36
  Speaker 1: people around the world so President Maquon as Europe's great
• 26:39
  Speaker 1: liberal hope. He seemed to be this new, very confident
• 26:44
  Speaker 1: blend of the best liberal instincts from the right and
• 26:48
  Speaker 1: the left of French politics European politics. But now we
• 26:52
  Speaker 1: look at the presidential campaign, he's he's polling only just
• 26:56
  Speaker 1: ahead of two extreme right candidates, one of which we
• 27:00
  Speaker 1: didn't even know about a few months ago. Is the
• 27:03
  Speaker 1: conclusion the rest of the world to draw that that
• 27:05
  Speaker 1: middle road that President mcrow was walking is impossible in
• 27:09
  Speaker 1: today's climate, just can't be done. No. I think, on
• 27:13
  Speaker 1: the contrary, that he um is the evidence that there
• 27:20
  Speaker 1: is a path for shuctule reforms, for the improvement of
• 27:26
  Speaker 1: the competitiveness of an economy and for the possibility of
• 27:34
  Speaker 1: giving to every citizens the chance of being successful. Of course,
• 27:40
  Speaker 1: we are facing a very stronger position from the extremist parties,
• 27:44
  Speaker 1: but that's the case everywhere in the Western world. It
• 27:48
  Speaker 1: has been the case in the United States, it has
• 27:50
  Speaker 1: been the case in Italy, it has been the case
• 27:53
  Speaker 1: in the UK. So it is the case in every
• 27:58
  Speaker 1: Western country. But the true is that there is a
• 28:02
  Speaker 1: possibility for this way to be successful. And I'm deeply
• 28:07
  Speaker 1: convinced that at the next president short election in France,
• 28:12
  Speaker 1: Emma will be successful because he has given the evidence
• 28:19
  Speaker 1: that if we are taking the right economic decisions, we
• 28:23
  Speaker 1: can get some very strong wizards. Once again, we are
• 28:27
  Speaker 1: on the right pass We should stick to that path
• 28:30
  Speaker 1: because it gives results to the French population. But just
• 28:34
  Speaker 1: to push back a little bit, those two extreme right
• 28:38
  Speaker 1: candidates are polling between them significantly more than President mcrow,
• 28:43
  Speaker 1: And when one looks at the stories and the language
• 28:47
  Speaker 1: from the presidential campaign, it feels like his his response,
• 28:52
  Speaker 1: his political response in order to win the election, has
• 28:55
  Speaker 1: been to move away from his liberal instincts and to
• 28:58
  Speaker 1: play up perhaps two or of the the illiberal or
• 29:02
  Speaker 1: the anti immigration side of French politics. So um, again,
• 29:08
  Speaker 1: from the outside, that seems like quite a dispiriting development
• 29:11
  Speaker 1: that the only way he can succeed is actually by
• 29:14
  Speaker 1: moving away from the liberal vision that he had outlined.
• 29:19
  Speaker 1: It depends on what you mean by a liberal revision.
• 29:23
  Speaker 1: If a liberal revision means to believe in the possibility
• 29:27
  Speaker 1: for every citizen to build its own success, which is
• 29:33
  Speaker 1: I think at the core of the poltical liberalism, I
• 29:37
  Speaker 1: could share that point of view. If you mean by
• 29:40
  Speaker 1: a liberal approach the fact that there is no need
• 29:44
  Speaker 1: for the state to intervene in the economy, I would
• 29:48
  Speaker 1: not share this point of view because the crisis just
• 29:51
  Speaker 1: proved one single thing. We need the intervention of the
• 29:56
  Speaker 1: French state or of the urban states to as the
• 30:00
  Speaker 1: consequences of the crisis. And if we have been successful
• 30:03
  Speaker 1: in twenty one to face the crisis, to protect the
• 30:09
  Speaker 1: companies and to protect the workers, and also to have
• 30:12
  Speaker 1: a very quick and sound economic we bond. That's because
• 30:18
  Speaker 1: the states and the public powers decided to intervene and
• 30:24
  Speaker 1: to give very strong responses to the crisis. It was
• 30:28
  Speaker 1: not the case in twenty eight and in twenty tendering
• 30:33
  Speaker 1: the financial crisis, and we were not successful during the
• 30:39
  Speaker 1: last financial crisis. We have drawn the lessons of these
• 30:43
  Speaker 1: financial crisis by asking the French state and by asking
• 30:47
  Speaker 1: the Upan states to intervene on the market to protect
• 30:51
  Speaker 1: the companies and to protect the salaries, and it proved
• 30:55
  Speaker 1: to be more efficient. It does not mean that I
• 30:59
  Speaker 1: think that the state would have to intervene in every
• 31:03
  Speaker 1: situation and under every circumstances. It just means that in
• 31:08
  Speaker 1: a period of economic crisis, we need the intervention of
• 31:12
  Speaker 1: state and we need to support other states. We did
• 31:16
  Speaker 1: speak several years ago. You have managed to be Finance
• 31:19
  Speaker 1: Minister through the whole of President mcross presidency, which is
• 31:22
  Speaker 1: not is quite a rare thing in France. I gather,
• 31:26
  Speaker 1: do you want to stay in your job if you
• 31:28
  Speaker 1: get the chance, or is there a better job in
• 31:29
  Speaker 1: government that you would like. There is no better job
• 31:33
  Speaker 1: than being finance minister. And I will just finished by
• 31:39
  Speaker 1: insisting on the necessity of having more stability in French politics.
• 31:44
  Speaker 1: You know, when we are talking about economy, about finance,
• 31:48
  Speaker 1: about coming back to some public finances, about the necessity
• 31:52
  Speaker 1: of having more industry in France, it takes time. And
• 31:58
  Speaker 1: the lesson that I draw from these five years as
• 32:01
  Speaker 1: a French finance minister is that if you want to
• 32:04
  Speaker 1: build something solid for the French nation and for the
• 32:07
  Speaker 1: French people, you need time. Time is of the essence.
• 32:12
  Speaker 1: If you want to be successful, you need more stebility
• 32:16
  Speaker 1: into French politics. Bruno Lamaire, thank you very much, Thank
• 32:20
  Speaker 1: you so much. That's it for Stephonomics. We'll be back
• 32:31
  Speaker 1: next week. But for more news from Bloomberg Economics, do
• 32:34
  Speaker 1: follow us Economics on Twitter and maybe check out my
• 32:37
  Speaker 1: cover story for this week's Business Week on the year
• 32:40
  Speaker 1: ahead for the global economy. This episode was produced by
• 32:43
  Speaker 1: Magnus Henrickson, with special thanks to Sean Donnan, will Horribin
• 32:47
  Speaker 1: and the French finance Minister Bruno Lamaire. Mike Sasso is
• 32:51
  Speaker 1: executive producer of Stephonomics and the head of Bloomberg podcast
• 32:54
  Speaker 1: is Francesca Leap