Speaker 1: Bloomberg Audio Studios, podcasts, radio news. President Macron, thank you
Speaker 1: for talking to Bloomberg. We're here at your annual Choose
Speaker 1: France conference for foreign investors.
Speaker 2: And as long as.
Speaker 1: I've known you, you have always wanted to prepare France
Speaker 1: to like business more, but also business to like France more.
Speaker 1: And you look and you see what is happening here.
Speaker 1: You have had many successes. You are about to trumpet
Speaker 1: fifteen billion euros of investment in France, but you also
Speaker 1: know France has problems. The economy is not growing that much.
Speaker 1: The economy since you came in has grown roughly half
Speaker 1: as fast as America. You still have a state that
Speaker 1: takes up fifty seven percent of GDP, and you have
Speaker 1: all that red tape which your government says it wants
Speaker 1: to get rid of, that is around three percent of GDP.
Speaker 1: So how do you persuade people to choose France against that?
Speaker 3: Thank you very much for being here in this vers
Speaker 3: castle and this is quite a good wrap up. It
Speaker 3: just made. We delivered a lot of reform since the
Speaker 3: very beginning twenty seventeen. Tax cuts, flat tax on capital gains,
Speaker 3: we decreased from thirty three point three to twenty five
Speaker 3: percents corporate taxes. We made a lot of reforms on
Speaker 3: labor law and after COVID. During this the past two
Speaker 3: years with inflation war in Ukraine, we passed reform and
Speaker 3: on pension scheme and unemployment mechanisms. I don't see a
Speaker 3: lot of countries around us having done so.
Speaker 2: So you don't just want to be compared to Europe
Speaker 2: to you.
Speaker 3: No, no, no, My point is just to say we delivered,
Speaker 3: We do deliver, and we will deliver. And this is
Speaker 3: why we will launch this week a new bunch of
Speaker 3: reform on labor market. We will launch a new bunch
Speaker 3: of simplification and attractiveness package for finance, and we will
Speaker 3: prepare for we have already launched new simplification and we
Speaker 3: will prepare for September a new bunch of reform on
Speaker 3: labor markets. So it's a permanent work. But I see
Speaker 3: where we come from and where we want to go. France,
Speaker 3: who was lagging behind clearly in Europe because of too
Speaker 3: much bureaucracy, a strong system, a lot of strength, but
Speaker 3: lack of competitiveness, I think we bridge I don't think
Speaker 3: I see that we clearly bridge the gap with the
Speaker 3: others and now we are runners in Europe. My concern
Speaker 3: is not just France, is Europe in comparison with US
Speaker 3: and China. And this is the point you mentioned during
Speaker 3: the three past decades. If you take this three the
Speaker 3: last three decades, we created half of the value per
Speaker 3: capita created by the US. Why lack of innovation, lack
Speaker 3: of investment. This is the main reason. This is why
Speaker 3: now my top priority is to have a European policy
Speaker 3: saying we have to be much more innovative, we have
Speaker 3: to create a much more efficient capital market, we have
Speaker 3: to invest much more from a common budget as Europeans
Speaker 3: and from the private sector, and we have to deliver
Speaker 3: in parallel our decabination because I do believe that climates,
Speaker 3: digital growsome job creation are the scripillars of what we
Speaker 3: have to deliver, and.
Speaker 2: Those will go through all of those.
Speaker 1: But just on that point about the European economy, you
Speaker 1: had a full scale attack on it at the Sorbonne
Speaker 1: where you said it is sclerotic, it is being left behind.
Speaker 1: Do you think that from the EU's point of view,
Speaker 1: that sclerotic economy is a bigger long term challenge and say,
Speaker 1: think this is one.
Speaker 3: I think this is clearly linked to what's happening as well.
Speaker 3: But we have to completely reset our model. I think
Speaker 3: now France clearly is one of the leading economy. We
Speaker 3: are number one in attractiveness, we've been number one during
Speaker 3: the past five years, and if you take job creation growth,
Speaker 3: we are one or second in the Eurozone.
Speaker 2: Do you think so.
Speaker 3: We are here now when I take Europe and especially
Speaker 3: the EU as a whole, but it's as well for UK.
Speaker 3: We have this issue in terms of business model. Why
Speaker 3: because we had low cost energy thanks to Russia, production
Speaker 3: thanks to santral and Eastern European countries with quite low costs,
Speaker 3: a market for exports China, and a geopolitical umbrella US.
Speaker 3: These pillars are being completely revised totally, yes, and it's
Speaker 3: no more valid. So we have to reinvent and how
Speaker 3: by creating much more value on our own by being
Speaker 3: much more innovative, by creating much more jobs and jobs
Speaker 3: with value, good jobs, I would say, on our continents.
Speaker 3: The key point is deliver much more innovation and productivity
Speaker 3: policy public and privates. The second key reforms is to
Speaker 3: accelerate the cabination and especially our electricity policy because through
Speaker 3: renewables and nuclear energy, we can deliver low carbon, sovereign
Speaker 3: and low cost energy, which is much more than important
Speaker 3: gas and fossil fuels. Third, we need much more investment
Speaker 3: based on common budget and my view, based on public
Speaker 3: reports and figures, we need one trially in more in
Speaker 3: terms of budget, in terms of spending, and in parallel,
Speaker 3: we have to make the Capitan Market Union a reality,
Speaker 3: which is can.
Speaker 1: I come on to the Capital Market Union because you
Speaker 1: have here an example.
Speaker 2: You have BNP.
Speaker 1: Yeah, now probably Europe's and definitely the Eurozone's most successful bank,
Speaker 1: worth eighty billion dollars. But you know you are entertaining
Speaker 1: these people like JP Morgan and someone JP Morgan is
Speaker 1: worth five hundred and fifty billion. It's it's nine times
Speaker 1: this big Bank of America, four times as big. And
Speaker 1: the reason why is BMP Parrybar cannot expand throughout the
Speaker 1: European Union and take over other banks. This is very cool,
Speaker 1: civil you would like to see BMP take over one
Speaker 1: of these, take over a German bank or an Italian one.
Speaker 2: I want.
Speaker 3: I mean, we do need a consolidation, but we do
Speaker 3: need as well an actual domestic market as Europeans which
Speaker 3: is not the case. We have to deal with twenty
Speaker 3: seven regulations. You know, in energy, finance and telco are
Speaker 3: the key sectors where single market doesn't exist. It was
Speaker 3: a choice at the very beginning. I do agree that
Speaker 3: we have now to open this box and to deliver
Speaker 3: a single market approach with much more efficient So our
Speaker 3: view is that now we want to elaborate Froanco German
Speaker 3: consensus on capital marketingion to have a single system of resolution,
Speaker 3: a single supervision and a much more integrated capital marketingion.
Speaker 1: Would you be happy with, say Spain Santandre coming and
Speaker 1: buying society general, I mean part of.
Speaker 3: That, it's part of the market, but dealing as Europeans
Speaker 3: means that you need consolidation as Europeans you're not.
Speaker 2: So it could be cross board emergers for directions.
Speaker 3: But this one is for banking union, it's already on track.
Speaker 3: Now we have to do it for capital marketingion, which
Speaker 3: is broader and and even more difficult. But we started
Speaker 3: to do so at a political level during the last console,
Speaker 3: and I do believe that we can find Aco German agreement.
Speaker 3: But why I want you to just understand the challenge
Speaker 3: for us seventy five percent of our financing as Europeans
Speaker 3: go through banks and insurance, so we need much more consolidation.
Speaker 3: But we need a clear circulation of the savings all
Speaker 3: around the place. This is the first objective, to be
Speaker 3: much more efficient and to be sure that our savings
Speaker 3: will be invested in the right sectors and the right geographies. Second,
Speaker 3: every year three hundred billion savings goes to finance the
Speaker 3: US economy because we are not attractive.
Speaker 2: So on.
Speaker 3: In parallel with this capital market union and the simplification
Speaker 3: having an equal single market, we clearly need the same
Speaker 3: level playing field as the US in terms of financing,
Speaker 3: which means when you take solvency in basil, as long
Speaker 3: as it's not implemented by the US competitors, it should
Speaker 3: not be implemented by the European competitors. Otherwise this is
Speaker 3: a killer for his taking because these regulations just prevent you,
Speaker 3: i mean, our banks from investing in equity, which is
Speaker 3: exactly what we need. And if you take the key
Speaker 3: driver of this difference between the US and Europe, the
Speaker 3: key driver is the fact that the US economy innovated
Speaker 3: and invested much more iniquity and innovation than the European economy.
Speaker 3: I think we did much better during in POSTCOVIC than
Speaker 3: what we did during the financial crisis. But now this
Speaker 3: is a totally new world and we do need this
Speaker 3: new business model for the Europeans, more innovation, more investment,
Speaker 3: single market and capital market onion and a relevant trade
Speaker 3: policy because I want to at this point known the
Speaker 3: US and now China are compliant with WTO Today we
Speaker 3: are the only one in the room to respect just
Speaker 3: the regulation of the beauty.
Speaker 2: And we are to naive we are to open both of.
Speaker 3: Them, their players and their economies. Can we have to
Speaker 3: do this thing?
Speaker 1: Can we come back to the to the issue of
Speaker 1: China later? But just another French company, Total you mentioned energy.
Speaker 2: Total's CEO has.
Speaker 1: Talked about moving its primary listing away from France towards
Speaker 1: New York.
Speaker 2: Would you be happy with that?
Speaker 3: Not at all? Would and I would be very surprised. No,
Speaker 3: I wait for any confirmation. I understood it was remorse so.
Speaker 1: But it's interesting that it's tied to the idea that
Speaker 1: he would face extra ESG measures here that he would
Speaker 1: not face in America.
Speaker 2: So thinks that would affect his valuation.
Speaker 3: Do you mean that we are more SERUS than the
Speaker 3: US in terms of green economy and transition.
Speaker 1: Yes, but you also in your speech at the Sorbonne
Speaker 1: you said, as I paraphrase, you said you cannot let
Speaker 1: decarbonization and be enemies exactly.
Speaker 3: And this is my point. But the point is just
Speaker 3: we have to be sure when we regulate, we should
Speaker 3: not overregulate. Yes, and I think now we have to deliver.
Speaker 3: We need in Europe much more investment. We have to
Speaker 3: cut that tabs have more flexibility. But in parallel everybody
Speaker 3: has to be serious. I saw a lot of funds,
Speaker 3: a lot of asset managers saying we are with you
Speaker 3: on climate change. Where is the beef? Are you sure
Speaker 3: you are sufficiently compliant? Are you sure you are clearly
Speaker 3: addressing the same issues. This is my point, and this
Speaker 3: is why we need a resting chrognization between the US
Speaker 3: and Europe. The restrant cognization is number one. The US
Speaker 3: regulation in terms of crimachange as should be more serious
Speaker 3: and realigned on the European ones. Second, the Europeans have
Speaker 3: to invest much more and be more serious and realign
Speaker 3: themselves on the US.
Speaker 1: To answer iven another French company, I asked you about
Speaker 1: total and bmp lvmh. I look, so nobody has done
Speaker 1: better under the Macron presidency than Banner or No. He's
Speaker 1: now his wealth has increased by one hundred and seventy
Speaker 1: billion euros and he is now the richest man in
Speaker 1: the world, probably the first Frenchman to have that honor
Speaker 1: since Napoleon. And I think we can both say brave
Speaker 1: to mister Io. He's done it in a more peaceful way.
Speaker 1: But it's interesting you look at the people who've right
Speaker 1: at the very top of the wealthiest people in France,
Speaker 1: mostly either airs or in fashion or both, and I
Speaker 1: wonder whether that is the kind of France you talked
Speaker 1: about creating. You always talk about technology, but the people
Speaker 1: who've done really well are these old style businesses.
Speaker 3: You're right, all of them. I don't think it's all
Speaker 3: style of business, but it's a business where we have
Speaker 3: competitive advantage luxury fashion and so because France is one
Speaker 3: of a great place and Bernadaud consolidated this market very early.
Speaker 3: He was one of the font in this industry, and
Speaker 3: I think it is very good and this is a
Speaker 3: chance for us because first we speak about a lot
Speaker 3: of jobs which are located in France because a lot
Speaker 3: of these jobs are impossible to be relocated elsewhere.
Speaker 2: When you speak.
Speaker 3: About alcohol, when you speak about cognac, maniac, champagne, fashion
Speaker 3: and making a lot of this stuff, it's added value.
Speaker 3: It's low qualified and very qualified jobs. And in tall
Speaker 3: it consolidated the market elsewhere. And thanks to the fact
Speaker 3: that is listed in France, we consolidate a lot of
Speaker 3: value and value creation as well. This is why thanks
Speaker 3: to total lvmh BNP and so on. But we are
Speaker 3: the second largest place of the world to list your company.
Speaker 1: But there is a there's a tension, isn't it If
Speaker 1: I look at all those people, or certainly as VMH
Speaker 1: carrying all those ones. They have done spectacically well by
Speaker 1: exporting to places like China. They've done very well out
Speaker 1: of globalization and all the prescriptions you were just talking
Speaker 1: about in terms of Europe having higher top trade rules
Speaker 1: being tougher with China. You know what will happen in
Speaker 1: a couple of months time, the Europeans will say we want.
Speaker 2: To put tariffs on electric vehicles.
Speaker 1: And what will happen is mister g despite what he
Speaker 1: told the last year, he will come back and will
Speaker 1: he will put tariffs on Cognac and that will help
Speaker 1: those very successful French business people.
Speaker 3: Look, I think this is exactly the mistake we made
Speaker 3: twenty years ago on the solar panels, and we killed
Speaker 3: them our industry. I'm very simple. I don't like your
Speaker 3: own blackmail anybody. I just look at a picture. When
Speaker 3: you have diaries of ten for your electric for Chinese
Speaker 3: electric vehicles entering into our market, and when you are
Speaker 3: taxed between fifteen and twenty four when you go to
Speaker 3: the Chinese market, you have an issue. And on all
Speaker 3: the different sectors. What we want is just reciprocity. We
Speaker 3: want and in fact more and that margins then regarding
Speaker 3: the relation with China, level playing field. So what we
Speaker 3: ask for is exactly that we want to be sure
Speaker 3: that in terms.
Speaker 2: Of tariffs, subsidies, rules of.
Speaker 3: Production, we have a fair competition. And I mentioned it
Speaker 3: very openly to present see. So it is not a
Speaker 3: geopolitical agenda. We don't want to blackmail and push back
Speaker 3: some of the production. We want to be sure it
Speaker 3: is fair. It's fair to launch precisely inquiries and look
Speaker 3: in details of the situation and revise it. If we
Speaker 3: are weak, if we are threatened by the fact that
Speaker 3: you can have retortion measures, you just don't do what
Speaker 3: you have to do. We had this discussion and this
Speaker 3: is why they decided not to implement the first measures
Speaker 3: on Cognac, but to withdraw the first one. So I
Speaker 3: think it's it's a normal approach. But look at the
Speaker 3: situation today. The European Union is the most open place
Speaker 3: of the world. But you cannot serve if at the
Speaker 3: same time you have subsidieson other capacities in China and
Speaker 3: protection in some part of the market, and inflation rediction
Speaker 3: acts and buy American acts in the US. It doesn't
Speaker 3: fly once again.
Speaker 2: So Europe has got to get tougher now.
Speaker 3: But this is a necessary not because we are protectionists,
Speaker 3: because we want to protect our.
Speaker 2: German The Germans do not agree with you without life.
Speaker 3: I think it depends whom in Germany and for which perspective.
Speaker 3: It's certainly true that some German companies, when they are
Speaker 3: incorporated in China, for instance, benefiting from subsiditions, not just German,
Speaker 3: European American. Their interest is probably to preserve that and
Speaker 3: to sell themselves are over capacities in China to the
Speaker 3: rest of the world. And especially the European markets. But
Speaker 3: the German economies interest is totally aligne with the French
Speaker 3: economies interests meaning creating jobs, creating value, but just protecting
Speaker 3: your business and your people when they are attacked by
Speaker 3: unfir measures and it's it's normal, it's part of the business.
Speaker 3: So for me, it's just a no brainer.
Speaker 1: It's a very interesting journey watching you make the French
Speaker 1: love business more and business love France more.
Speaker 2: Thank you very much, no, thank you. Into Bloomberg. It's
Speaker 2: very important.
Speaker 3: Thank you for being here. I hope you will have
Speaker 3: the importanity to discuss with a lot of CEOs and
Speaker 3: we will continue because business is in permanent evolution, given
Speaker 3: the fact that your politics.
Speaker 2: Is start moving all the time.
Speaker 3: Thank you, thank you.
Speaker 2: Jemis