WEBVTT - The View From Paris 0:00:03.400 --> 0:00:06.720 Hello, and welcome to Stephanomics, the podcast that brings the 0:00:06.760 --> 0:00:15.560 global economy to you. Talking of the global economy, I 0:00:15.600 --> 0:00:19.560 wonder have you thought much about France recently. I met 0:00:19.560 --> 0:00:21.959 the last time you really paid it any attention was 0:00:22.000 --> 0:00:25.119 about the second half of last year. Watching pictures of 0:00:25.160 --> 0:00:28.400 angry French people in high vis jackets. There's Le Jeune 0:00:28.960 --> 0:00:32.080 rioting on the streets and generally causing trouble for President 0:00:32.159 --> 0:00:37.879 Emmanuel Macon. His pole ratings collapsed and many decided that lomacronism. 0:00:39.360 --> 0:00:42.080 He ended up giving in to some of the Jean's requests, 0:00:42.080 --> 0:00:45.840 including an extra ten billion euros worth of targeted tax cuts. 0:00:46.440 --> 0:00:49.640 Nice for the recipients, but not a great result for 0:00:49.680 --> 0:00:52.120 the Western leader who was supposed to be turning the 0:00:52.200 --> 0:00:56.920 tide against populism. But that was then. This week, the 0:00:56.920 --> 0:00:59.240 French had been hosting the G seven meeting of finance 0:00:59.280 --> 0:01:01.520 ministers and sent for bank governors, and you have to 0:01:01.560 --> 0:01:04.440 say that France and the French economy are looking better 0:01:04.480 --> 0:01:07.880 than most. I went to Paris beginning of this week 0:01:08.200 --> 0:01:10.800 to find out more. In this episode, we're going to 0:01:10.920 --> 0:01:13.760 play you two interviews from that trip. The first with 0:01:13.840 --> 0:01:17.399 the French Finance minister himself, Bruno Lemaire, and the second 0:01:17.400 --> 0:01:21.080 with Laurens Boone, the extremely smart chief economist of the 0:01:21.160 --> 0:01:24.800 O E c D now Monsieur le Maire is known 0:01:25.000 --> 0:01:28.200 for being a mischievous finance minister. He sometimes likes to 0:01:28.200 --> 0:01:31.200 make a splash. I think when I spoke to him 0:01:31.200 --> 0:01:33.920 in his grand office at the French Treasury, he didn't 0:01:33.959 --> 0:01:36.319 want to make many waves with the G seven coming 0:01:36.360 --> 0:01:39.320 to town. But see for yourself. Listen to first the 0:01:39.480 --> 0:01:42.039 edited interview with him, and then hang on for a 0:01:42.080 --> 0:01:45.040 more candid take on France and the state of economics 0:01:45.240 --> 0:01:55.160 from Laurens Boone. I wanted to talk about President Macron 0:01:55.320 --> 0:01:57.920 and where he stands in the global stage. When he 0:01:58.000 --> 0:02:02.920 became president, he did seem to be in confronting one 0:02:02.960 --> 0:02:06.160 of the big challenges that people face, populism. He was 0:02:06.200 --> 0:02:08.800 going to be a role model for for the free 0:02:08.800 --> 0:02:12.960 world in showing us how to defeat populism. If you 0:02:13.000 --> 0:02:15.399 were looking at the last year or so, you'd say, well, 0:02:15.440 --> 0:02:19.200 the lesson of the example that MCCA is setting is 0:02:19.480 --> 0:02:21.799 you need to give in to the populace. And then 0:02:21.840 --> 0:02:23.960 you do find is that is that the lesson of 0:02:24.040 --> 0:02:30.160 the response to the yellow vests last year. I think 0:02:30.200 --> 0:02:36.480 that the right response to the yellow jackets movement is 0:02:36.520 --> 0:02:43.200 to take into account the difficulties that many people, either 0:02:43.280 --> 0:02:48.320 in France or in any upan country are facing. The 0:02:48.480 --> 0:02:53.480 rise of inequalities among developed countries is a key issue. 0:02:54.320 --> 0:02:59.200 The differences between the highest wages and the other wages 0:02:59.560 --> 0:03:04.400 is a key difficulty. The fact that some of the people, 0:03:04.840 --> 0:03:08.240 either in France or once again in any other country, 0:03:08.400 --> 0:03:12.359 are not able to leave from their earning is a 0:03:12.440 --> 0:03:15.840 key question. And I think that the yellow jacket movement 0:03:16.440 --> 0:03:20.560 is not only a French movement, but it's also the 0:03:20.720 --> 0:03:25.720 evidence that varies a problem with the capitalism as it stands. 0:03:26.400 --> 0:03:30.520 We need to improve capitalism, and I think that the 0:03:30.520 --> 0:03:33.000 fact that we have decided to stick to the path 0:03:33.040 --> 0:03:37.960 of reforms by taking or shoe into accounts the requirements 0:03:38.040 --> 0:03:42.360 of all the people that are asking for more fairness, 0:03:42.480 --> 0:03:46.240 for more justice, is the best way of dealing with 0:03:46.280 --> 0:03:49.360 that issue. They took their concerns to the streets, including 0:03:49.520 --> 0:03:53.240 with violence, and the response of the government was to give. 0:03:53.280 --> 0:03:57.160 In was to give. I would not say that we 0:03:57.160 --> 0:04:00.160 are not giving to a violence. We are against any 0:04:00.280 --> 0:04:06.000 kind of violence, of course, but even if the movement 0:04:06.040 --> 0:04:10.200 of the Yellow Jackets has transformed at the end into 0:04:10.280 --> 0:04:21.040 a violent demonstrations and violent including attacks against the policeman 0:04:21.320 --> 0:04:28.880 and story stores on the streets and so on. I 0:04:28.920 --> 0:04:33.400 think that we should not undermine what is behind the 0:04:33.440 --> 0:04:37.719 yellow jacket movement. Behind the yellow jackets movements, there are 0:04:38.000 --> 0:04:42.480 men and women that are not living distantly from their 0:04:42.600 --> 0:04:46.120 jobs and from their earnings, and they are just asking 0:04:46.760 --> 0:04:50.120 for a kind of distancing. They want to have a 0:04:50.160 --> 0:04:54.400 decent life, they want to leave from their jobs, and 0:04:54.920 --> 0:04:59.320 all our policy is trying to give a concrete response 0:04:59.720 --> 0:05:04.839 to that fair requirement. We want work to pay and 0:05:04.920 --> 0:05:08.680 that's it' that's at the heart of our economic policy 0:05:08.920 --> 0:05:13.799 and in pushing your version of the right economic model, 0:05:14.000 --> 0:05:17.159 the French economic model and what they believe Europe should 0:05:17.160 --> 0:05:20.080 look like. Is it going to be easier if and 0:05:20.160 --> 0:05:22.480 when you can ever get rid of the UK, if 0:05:22.520 --> 0:05:28.279 the UK finally does achieve brexit. No, I really think 0:05:28.279 --> 0:05:32.719 that the fight, that the fact that the UK is 0:05:33.440 --> 0:05:37.719 leaving the EU is a pity and I'm sad about that. 0:05:38.360 --> 0:05:49.919 Frankie speaking, Francis says hosting this G seven, and it 0:05:50.000 --> 0:05:53.360 looks like luck is on on France's side. At the moment. 0:05:53.360 --> 0:05:55.560 There are things that have been failures in the past, 0:05:55.680 --> 0:06:00.440 like failures to to boost exports significantly over the years, 0:06:01.440 --> 0:06:04.360 a failure to reign in borrowing in debt, and now 0:06:04.400 --> 0:06:06.960 if we look this year, both of those things look 0:06:07.040 --> 0:06:10.800 like strengths. Frances is less exposed to the trade wars 0:06:10.880 --> 0:06:14.640 and actually has loosened fiscal policy potentially, just as other 0:06:14.680 --> 0:06:17.760 people are starting to say their economies need a bit 0:06:17.800 --> 0:06:20.359 more support. So are you Are you a model for 0:06:20.400 --> 0:06:23.160 the rest of the world or just very lucky. I 0:06:23.160 --> 0:06:25.520 would not say that we are modeled, and they would 0:06:25.520 --> 0:06:28.480 not say that we are lucky. I would just say 0:06:28.520 --> 0:06:33.560 that we are strongly willing to improve the competitiveness of 0:06:33.560 --> 0:06:36.360 the French economy. And I think that with em Macon 0:06:36.960 --> 0:06:39.880 we have taken the right decisions. We have taken the 0:06:39.960 --> 0:06:48.039 right decisions by transforming or taxation system, by improving or 0:06:48.800 --> 0:06:53.039 laberal market, and by taking all the required decisions to 0:06:53.200 --> 0:06:57.960 support or enterprises and samese. So I think with that 0:06:58.000 --> 0:07:01.400 we're on the right track. We have very concrete results. 0:07:01.800 --> 0:07:05.560 I mean, that's the level of growth easier satisfying one 0:07:05.720 --> 0:07:08.160 even if we can do more, and that we can 0:07:08.200 --> 0:07:12.280 improve that situation we are reducing the level of an 0:07:12.280 --> 0:07:15.080 employment in France or we are on the right track, 0:07:15.520 --> 0:07:19.320 but we are fully determined to stick to the path 0:07:19.560 --> 0:07:24.160 of reforms for the sake of having better results. When 0:07:24.200 --> 0:07:25.880 you think about the things you want to change, it 0:07:25.920 --> 0:07:28.400 does look like the summit is going to be hijacked 0:07:28.440 --> 0:07:32.480 by the big Internet companies. There's been much discussion around 0:07:32.920 --> 0:07:38.480 from Donald Trump tweeting criticizing the French proposal for taxing 0:07:38.640 --> 0:07:42.640 these big internet companies on their trade in the country. 0:07:43.400 --> 0:07:46.560 But also you have talked about that the concerns around 0:07:46.640 --> 0:07:51.040 Libra and the Facebook's proposed new currency. So do you 0:07:51.080 --> 0:07:53.680 think that's going to end up dominating everything. I think 0:07:53.680 --> 0:07:56.560 that's a key issue and it will dominate not only 0:07:56.600 --> 0:08:01.239 the summer, but I think that all these issue of 0:08:01.360 --> 0:08:08.240 the digital giants will dominate the economic debate for the 0:08:08.320 --> 0:08:11.560 next decade. I think that's a key issue. And you 0:08:11.600 --> 0:08:15.440 should also mention the fact that the US administration has 0:08:15.560 --> 0:08:23.080 decided to impose a penalty of five billion dollars on Facebook, 0:08:23.400 --> 0:08:27.160 which is a clear signal of the necessity of putting 0:08:27.200 --> 0:08:32.280 more regulation among the Internet giants and the necessity to 0:08:32.440 --> 0:08:37.480 build together a fair regulation for the Internet giants. Then 0:08:37.480 --> 0:08:40.080 there is a question of the currency, the so called Libra, 0:08:41.000 --> 0:08:44.680 the project from a Facebook. I think that we have 0:08:44.760 --> 0:08:48.480 to be very cautious and we have to avoid this 0:08:48.679 --> 0:08:54.280 proposal Libra becoming a kind of a sovereign currency. I 0:08:54.360 --> 0:08:58.680 don't want a private company to take the whole of 0:08:58.720 --> 0:09:03.040 a sovereign state and having the power of in storing 0:09:03.200 --> 0:09:05.760 a sovereign currency. I think that it would be a 0:09:05.840 --> 0:09:10.280 threat for the sovereignty of the states, and it would 0:09:10.280 --> 0:09:15.360 not feed our idea of what a sovereign currency should be. 0:09:15.920 --> 0:09:18.720 There's a lot of opposition to this proposal, but I 0:09:18.760 --> 0:09:21.680 wonder in practice how easy is it going to be 0:09:21.800 --> 0:09:25.760 to prevent Facebook from introducing this proposal. I mean, it's 0:09:25.800 --> 0:09:28.320 one thing to set themselves up as a bank, but 0:09:28.480 --> 0:09:31.840 having just a method of payment globally, arguably they already 0:09:31.880 --> 0:09:34.160 have the capacity to do that. If it doesn't if 0:09:34.200 --> 0:09:37.839 it is only a method of payment, fine, But if 0:09:37.920 --> 0:09:42.559 that method of payment becomes a sovereign currency, it might 0:09:42.600 --> 0:09:45.480 be a parliment. We also have to ensure to all 0:09:45.559 --> 0:09:49.840 citizens that there is no problem with money lundering, for instance, 0:09:50.559 --> 0:09:54.040 or the funding of terrorism. So we have to give 0:09:54.080 --> 0:10:00.160 all the insurances to our citizen that this way of 0:10:00.520 --> 0:10:05.040 exchanging goods is sticking to the same kind of commitments 0:10:05.080 --> 0:10:09.320 that everybody is obliged to take. You could say this, actually, 0:10:09.360 --> 0:10:15.480 even this opposition and debate shows how dominant these companies 0:10:15.520 --> 0:10:19.560 have become in their influence on the discussions at global levels. 0:10:19.600 --> 0:10:21.880 I mean, this is a G seven meeting of finance 0:10:21.920 --> 0:10:26.120 ministers and one proposal by one company. It sounds like 0:10:26.120 --> 0:10:29.480 it's going to take quite a big chunk of your discussions. Yes, 0:10:29.520 --> 0:10:34.600 but you know it is not any company. It is 0:10:34.640 --> 0:10:37.160 not the smallest company of the world, which is one 0:10:37.200 --> 0:10:40.600 of the biggest company of the world. So I think 0:10:40.640 --> 0:10:47.160 that it's our job to define the regulatory framework that 0:10:47.520 --> 0:10:52.080 is necessary to avoid any risks linked to the creation 0:10:52.400 --> 0:10:56.240 of such a libra. That's what we try and get 0:10:56.280 --> 0:10:58.600 into the issues as well on the Stephanomics podcast. So 0:10:58.640 --> 0:11:09.200 thank you very much. Thank you. So that was Bruno Lamaire, 0:11:09.520 --> 0:11:12.520 the French finance Minister, speaking just before the G seven 0:11:12.520 --> 0:11:15.200 meeting of finance ministers and central bank governors that he 0:11:15.280 --> 0:11:20.000 was hosting in Chauntily in northern France. Now here's Lawrence Boon, 0:11:20.559 --> 0:11:29.720 chief economist at the o e C. D. Laurence welcome 0:11:29.840 --> 0:11:34.120 to stephanomics. UM. I was talking to the Finance Minister 0:11:34.120 --> 0:11:38.400 Bruno Lamaire earlier. He's very focused on the G seven, 0:11:38.840 --> 0:11:41.320 but I and he meant he said that he thought 0:11:41.400 --> 0:11:45.080 maybe France was a model for other countries. I thought, 0:11:45.640 --> 0:11:47.960 if they are a model, it's by luck. You know, 0:11:48.000 --> 0:11:53.120 you've had years of not managing to really significantly increase 0:11:53.200 --> 0:11:57.480 their net exports and their success in the global trading system, 0:11:57.520 --> 0:12:01.760 not really getting on top of their debt, and they're 0:12:01.800 --> 0:12:04.400 borrowing as abc D and others have often told them 0:12:04.520 --> 0:12:09.160 to do, and most recently giving into the populist giving 0:12:09.200 --> 0:12:12.360 them quite a lot of money to make them go away. 0:12:12.480 --> 0:12:14.440 Do you think that is a model that the rest 0:12:14.440 --> 0:12:17.280 of the world should follow. Ignored ignored the OCD advice 0:12:17.320 --> 0:12:19.680 on lots of things, and you'll end up coming smelling 0:12:19.720 --> 0:12:23.560 of roses. So there's one thing which I think is true, UM, 0:12:23.640 --> 0:12:26.000 is that, as you were a leading to, France is 0:12:26.120 --> 0:12:29.760 much less dependent on global trade and expots than many 0:12:29.800 --> 0:12:35.760 other your area countries. Whereas you will see that in Germany, 0:12:35.840 --> 0:12:38.920 for example, about twenty percent of the value edits coming 0:12:38.960 --> 0:12:42.400 from manufacturing, in the frant sits on the ten percent. 0:12:42.600 --> 0:12:45.680 So when the same as the UK, although the French 0:12:45.720 --> 0:12:50.440 were always saying that they're much bigger manufacturing what they 0:12:50.520 --> 0:12:52.920 have their own brands and your kay, it might not 0:12:53.080 --> 0:12:57.000 be always the local brand, but so that's true. That's 0:12:57.080 --> 0:13:00.840 when when the economy is going down because of a 0:13:00.880 --> 0:13:04.400 contraction in trade or slow down in trade, and FRONTS 0:13:04.440 --> 0:13:07.600 attempts to feel much less than the other. You saw 0:13:07.640 --> 0:13:10.160 that in twenty or nine with the Big crisis, where 0:13:10.160 --> 0:13:12.960 the decision was about half what it was in other countries. 0:13:13.200 --> 0:13:16.600 But conversely, when the rest of the world is booming 0:13:16.640 --> 0:13:20.400 on the back of expansion expansion every trade, then France 0:13:20.559 --> 0:13:26.400 is going less fast all in normal Fronts comes as 0:13:26.480 --> 0:13:30.880 a welfare farming country in twenty nineteen UM, but it's 0:13:30.880 --> 0:13:35.240 still one in the quarter of GDP. Growth is you know, 0:13:35.360 --> 0:13:39.840 not exactly a boom salm, but in France we like 0:13:39.960 --> 0:13:44.000 to be put well, but it is striking in years 0:13:44.080 --> 0:13:48.320 of people pointing to Frances. You know, now, I think 0:13:50.360 --> 0:13:54.840 debt public debt ratios a share of the economy, the 0:13:55.360 --> 0:13:59.040 very large share of government spending in the economy include 0:14:00.120 --> 0:14:03.480 something like six if you're also including the industries that 0:14:03.520 --> 0:14:05.680 are owned by that both the government, the o C 0:14:05.760 --> 0:14:09.200 D and others have been telling France for years that 0:14:09.280 --> 0:14:12.120 it ought to do more dramatic reform, that it was 0:14:12.160 --> 0:14:14.240 stuck in the past, that it was going to face 0:14:14.280 --> 0:14:16.920 and have to face the music at some point. It's 0:14:16.960 --> 0:14:18.840 never really had to face the music. In fact, as 0:14:18.880 --> 0:14:21.280 I say now, it seems to be doing quite nicely 0:14:21.480 --> 0:14:25.600 relative so I think it had to face the music 0:14:25.640 --> 0:14:28.800 in a sense with what happened in December, and then 0:14:28.920 --> 0:14:33.240 that was quite a big wake up call about them French. 0:14:33.280 --> 0:14:38.320 Of the social economic background in France. Um, it was 0:14:38.360 --> 0:14:41.120 a big wake up call in terms of yes, fronts 0:14:41.200 --> 0:14:44.560 is a highly redistributive country and you alluded to it. 0:14:44.760 --> 0:14:47.640 Fifty seven percent of g D people expending is the 0:14:47.760 --> 0:14:53.200 u c D record. But these massive redistributions actually not 0:14:53.400 --> 0:14:56.640 enough to advise people concern and I think would happen 0:14:56.680 --> 0:15:01.280 in December should really shed light on the structural issues 0:15:01.440 --> 0:15:07.280 that FUNDS has, which is mostly a huge inequalities of opportunities. Um, 0:15:07.600 --> 0:15:12.640 we've just published our flagship publication, Going for Growth, which 0:15:12.800 --> 0:15:19.800 monitors reforms on product market, label market, and I think 0:15:19.800 --> 0:15:22.000 we can barely say that there's still a lot to 0:15:22.120 --> 0:15:25.560 do in Funcy. Even so I must say that that 0:15:25.760 --> 0:15:29.240 reforms have been proceeding for the past few years, even 0:15:29.320 --> 0:15:32.160 in sometimes in small steps, but where it's it's the 0:15:32.200 --> 0:15:35.360 beginning of a journey. I have to say you mentioned 0:15:35.360 --> 0:15:38.400 that report, um I have I've probably been doing this 0:15:38.480 --> 0:15:40.040 job too long, but I've had a lot of read 0:15:40.040 --> 0:15:43.640 a lot of similar reports from the cd UM and 0:15:43.720 --> 0:15:48.040 which normal we publish it with. Yes, that's right and well, 0:15:48.080 --> 0:15:50.360 but also in sort of other fields. And of course 0:15:50.400 --> 0:15:53.640 you've not been a chief economist for for all of 0:15:53.640 --> 0:15:56.080 that period. But I was sort of struck that the 0:15:56.520 --> 0:16:00.800 description of the problem changes in these reports. So in 0:16:00.960 --> 0:16:05.200 your you talk about the need to particularly the sort 0:16:05.240 --> 0:16:08.760 of inclusive element. We need to raise opportunities for all 0:16:09.960 --> 0:16:15.320 challenges of globalization, digitalization, aging, environment is more front and 0:16:15.400 --> 0:16:17.880 center than it has been maybe in the past. But 0:16:18.000 --> 0:16:20.440 the solutions that the o c D sees to all 0:16:20.480 --> 0:16:23.280 these problems seem to be much similar to the ones 0:16:23.400 --> 0:16:26.880 they saw before. And we always need to have structural 0:16:26.920 --> 0:16:30.400 reform of product markets and labor markets. I mean, some 0:16:30.440 --> 0:16:32.880 people would say it was doing some of those reforms 0:16:32.880 --> 0:16:35.600 in some of these countries that cause the political backlashes 0:16:35.640 --> 0:16:38.520 which governments are now dealing with. UM I think in 0:16:38.520 --> 0:16:40.680 a sense some of what you say is is Some 0:16:40.760 --> 0:16:45.280 of which you to is actually right. Um, if you 0:16:45.320 --> 0:16:47.840 look at the headline of the reform we recommend, they 0:16:47.880 --> 0:16:51.240 look pretty much the same. But when you look at 0:16:51.240 --> 0:16:54.080 a more granula level and looking for in that's something 0:16:54.160 --> 0:16:58.120 we want to do math, they've actually evolved quite significantly. 0:16:58.480 --> 0:17:00.760 Let me take the example of the mean mum wage 0:17:01.160 --> 0:17:05.080 um fifteen years ago, twenty years ago. I'm not'm sure 0:17:05.080 --> 0:17:07.920 you were reading it already. Invite you know any farming 0:17:07.960 --> 0:17:10.200 ly the O E c D would say minimum wage 0:17:10.280 --> 0:17:13.520 bad for employment and label market. I think when you 0:17:13.560 --> 0:17:15.520 look at what we do now, and it's visible in 0:17:15.560 --> 0:17:18.920 going far ways other job strategy, we are much more 0:17:19.040 --> 0:17:21.800 pre size and it deepens a lot more on the countries. 0:17:21.920 --> 0:17:26.040 There's definitely been a change of attitude across the well 0:17:26.119 --> 0:17:29.800 certainly across a lot of economics economists on the minimum wage. 0:17:30.119 --> 0:17:32.359 But I was thinking, for example, of the sort of 0:17:32.400 --> 0:17:35.359 structural reforms you talk about, reforms to boost competition in 0:17:35.440 --> 0:17:39.480 markets for goods and surfaces, opening up markets to entry, 0:17:40.960 --> 0:17:44.560 competition and foreign trade is essential for innovation. You have 0:17:44.600 --> 0:17:47.320 all this stuff, but when you do that, I mean 0:17:47.320 --> 0:17:49.600 the way that it changed. The way that it increases 0:17:49.640 --> 0:17:53.639 innovation and increases efficiency is by forcing some companies to 0:17:53.720 --> 0:17:56.879 close down and forcing some people out of work and 0:17:56.920 --> 0:17:59.680 putting them into other things. And it's precisely that kind 0:17:59.680 --> 0:18:02.919 of actual change that a lot of those yellow vests 0:18:03.160 --> 0:18:06.560 would have been, at least at some level complaining about 0:18:06.640 --> 0:18:09.520 they feel already that the economy has changed too much 0:18:09.600 --> 0:18:14.120 and that their old lifestyle has been threatened. It's true. 0:18:14.359 --> 0:18:17.919 So if let's look at it in sequence, higher competition 0:18:18.000 --> 0:18:21.399 will boost innovation. There's there's a little doubt for that. 0:18:22.040 --> 0:18:24.879 Now there are two consequences we should take into The 0:18:24.920 --> 0:18:29.320 first one is higher competition and intellectual property right, and 0:18:29.480 --> 0:18:33.920 never look at one policy in isolation. It's higher competition 0:18:34.000 --> 0:18:38.320 and a regulatory regime for property right that will allow 0:18:38.760 --> 0:18:41.479 the innovator to keep a bit of the rent of 0:18:41.520 --> 0:18:44.680 the innovation it's making at the beginning, but not too long. 0:18:45.680 --> 0:18:48.480 And if we look, for example, at the pharmaceutical industry, 0:18:48.560 --> 0:18:51.280 those ones have probably been there too long, so then 0:18:51.359 --> 0:18:55.240 they start inventing the welfare of people. So that's one change, 0:18:55.880 --> 0:18:59.679 and the other is competition works when if you have 0:19:00.119 --> 0:19:03.840 a label market where people who are displaced as you 0:19:04.240 --> 0:19:08.480 highlight can be put back in another job of the 0:19:08.520 --> 0:19:11.280 same level and quality of as what they were doing 0:19:11.440 --> 0:19:15.720 fairly quickly um. And that's where I think we have evolved, 0:19:15.800 --> 0:19:19.240 and actually all economies we should do a big meya coupa, 0:19:19.440 --> 0:19:22.159 because we all talk about the benefit of trade for 0:19:22.240 --> 0:19:26.080 everybody without looking and disaggregate. But that's changed a lot, 0:19:26.720 --> 0:19:28.879 and we're doing quite a lot of work actually on 0:19:28.960 --> 0:19:33.200 this to say it's there's no doubt competition openness is good, 0:19:33.359 --> 0:19:36.639 but there's no doubt either that it's hurting some people. 0:19:37.160 --> 0:19:45.639 And these people we need to take care of, especially 0:19:45.680 --> 0:19:48.200 if we look at the very low level of interest 0:19:48.280 --> 0:19:50.320 rates around the world and the fact that people expect 0:19:50.400 --> 0:19:53.760 them to remain low for for long term structural reasons, 0:19:53.760 --> 0:19:57.600 at least for a while. That has changed people's view 0:19:57.680 --> 0:20:01.439 of what is a sustainable fiscal position for a government. 0:20:01.440 --> 0:20:02.919 You know, if you've got if you're paying less for 0:20:02.960 --> 0:20:06.439 your debt quite far into the future, you can probably 0:20:06.440 --> 0:20:08.639 afford to have more of it. If you were writing 0:20:09.520 --> 0:20:13.080 the convergence criteria or the fiscal rules for the European 0:20:13.560 --> 0:20:16.679 mirror Zone now they would be very different when they 0:20:16.720 --> 0:20:18.400 I mean even just in terms of what we think 0:20:18.400 --> 0:20:20.920 as a high debt level or an unsustainable that level. 0:20:21.880 --> 0:20:24.159 So I agree with you that it would likely be 0:20:24.240 --> 0:20:26.760 different and at the very low rate for a long 0:20:26.800 --> 0:20:29.360 time change things. At the same time, I think if 0:20:29.400 --> 0:20:31.600 we're only here and off in this debate, is the 0:20:31.640 --> 0:20:34.560 initial what the initial level of debt is for some 0:20:34.600 --> 0:20:38.000 countries um, and some of them have very high debt 0:20:38.080 --> 0:20:41.720 and some of them we we still am, I think rightly. 0:20:41.760 --> 0:20:44.280 So we commented that they should actually be careful to 0:20:44.400 --> 0:20:48.480 how much debt too. They've got just put it in conte. Sorry, 0:20:48.480 --> 0:20:50.600 but just if you mentioned the Japan example, I mean 0:20:50.600 --> 0:20:52.399 your Japan, it turns out now is have you know 0:20:52.440 --> 0:20:56.680 well over two GDP debt. We've always had a sort 0:20:56.680 --> 0:20:58.280 of thing in our mind that once you get into 0:20:58.320 --> 0:21:02.320 three figures, once you get sort of hundred, that's when 0:21:02.640 --> 0:21:06.080 things start to get beyond the pale. I mean, do 0:21:06.080 --> 0:21:08.000 you think even that has changed if we're looking at 0:21:08.040 --> 0:21:11.159 the Japan situation or not. So, I think Japan is 0:21:11.440 --> 0:21:14.320 very specific, not only because that's cloth that if you 0:21:14.359 --> 0:21:18.240 look at the two GP ratio, it's it's a lot lower. Also, 0:21:18.320 --> 0:21:22.080 it's got a very spatial labor market where everybody is 0:21:22.119 --> 0:21:25.200 employed even if you know they don't have a job 0:21:25.280 --> 0:21:28.639 of the same intensity from one worker to another. The 0:21:28.720 --> 0:21:31.320 coesion of the society is very different from what we 0:21:31.440 --> 0:21:35.440 see in Europe. Um. The advantage or the comparative advantage 0:21:35.480 --> 0:21:39.000 of your should be that there is a your area 0:21:39.520 --> 0:21:42.640 which is hanging all these nation states together and means 0:21:42.720 --> 0:21:47.840 that from a whenever one acts on a policy lever 0:21:48.040 --> 0:21:50.639 then it has an impact throughout the regions and that 0:21:50.720 --> 0:21:55.040 should minimize the positive or negative reform that anybody has 0:21:55.160 --> 0:21:58.560 to do. And I think that's where governments need to 0:21:59.440 --> 0:22:02.879 get back to discuss. It's in their common interest. What 0:22:03.240 --> 0:22:05.960 surprised me talking to Bruno Lamire is there's going to 0:22:06.040 --> 0:22:09.880 be a whole chunk of the G seven finance ministers 0:22:10.520 --> 0:22:14.760 devoted to talking about just one company's proposal for a 0:22:14.880 --> 0:22:19.320 digital currency or a new global currency. The liber Facebook 0:22:19.400 --> 0:22:23.920 only produced this proposal a matter of weeks ago, and 0:22:24.119 --> 0:22:27.000 yet you have some of the most important finance mesites 0:22:27.080 --> 0:22:29.320 in the world spending quite a lot of their time 0:22:29.520 --> 0:22:32.000 focus just on that. Are we getting to the point 0:22:32.080 --> 0:22:35.960 where these companies are as important or more important than 0:22:36.040 --> 0:22:40.440 some of those G seven countries. So I think there's 0:22:40.480 --> 0:22:43.679 one valid comparison, which is in terms of the people 0:22:44.000 --> 0:22:49.800 that that this company could be could be um, the 0:22:49.920 --> 0:22:53.840 share of people are using this company's application, right, and 0:22:53.960 --> 0:22:57.440 you have something Simili in China and that's also delivering 0:22:57.480 --> 0:23:00.000 a payments esteem and so that can give an idea 0:23:00.080 --> 0:23:04.920 about what that means. Now, a proper money, as you know, 0:23:05.320 --> 0:23:09.440 has legal tender because it's backed by your state, which 0:23:09.480 --> 0:23:13.000 wouldn't be the case here. But at the same time 0:23:13.119 --> 0:23:18.480 it would affect quite enormous amount of people and it 0:23:18.560 --> 0:23:21.520 would have to be linked to the payment system. Um. 0:23:22.119 --> 0:23:24.680 So that's when it comes to Okay, if it's linked 0:23:24.680 --> 0:23:27.119 to the pavement system, how can it affect it, how 0:23:27.200 --> 0:23:29.600 can it affect other currency? What does that mean for 0:23:29.720 --> 0:23:32.840 finance stability? And in that respect, I think it's a 0:23:34.400 --> 0:23:37.320 it's not only normal, but it's for once. As you 0:23:37.400 --> 0:23:40.840 were seeing earlier, it's very rapid the reaction of Finance Minister. 0:23:41.000 --> 0:23:43.159 So it's great that they're talking about it, said the 0:23:43.280 --> 0:23:48.200 G seven. Finally, you did mention this question of whether 0:23:48.280 --> 0:23:53.639 we're responding fast enough to climate change and changing our 0:23:53.680 --> 0:23:56.240 economy around to be I think it's probably a universal 0:23:56.280 --> 0:23:59.719 agreement that we're not any of us responding quickly now. 0:24:00.240 --> 0:24:02.240 But I wonder whether you've thought about we talked before 0:24:02.280 --> 0:24:06.120 about the sort of reforms that have long been proposed 0:24:06.160 --> 0:24:07.800 to O c D and having to go back and 0:24:07.920 --> 0:24:10.080 maybe tweat them to make sure that they're not having 0:24:11.160 --> 0:24:14.960 inequitable consequences, you know, to think about the political economy. 0:24:15.240 --> 0:24:19.240 Are you also thinking about that for the environment, because 0:24:20.280 --> 0:24:22.840 it struck me that a loss of I'm not sure 0:24:22.920 --> 0:24:25.760 I know the answer to whether you know combating climate 0:24:25.880 --> 0:24:29.680 change is going to be progressive or regressive for the 0:24:29.720 --> 0:24:31.720 income scale, but I kind of I think it's sort 0:24:31.720 --> 0:24:34.760 of important to know. Now you're absolutely right, So I 0:24:34.840 --> 0:24:37.520 couldn't give you the reasons because we've actually launched this 0:24:38.320 --> 0:24:40.720 a few at least on my side, a few weeks 0:24:40.760 --> 0:24:42.600 and months ago. But what we're trying to do is 0:24:42.680 --> 0:24:46.120 exactly that we have what type of investment, which investment 0:24:46.240 --> 0:24:50.000 compared combined? So we with a carban tax, which one 0:24:50.160 --> 0:24:53.719 we know this has implication and the delusion as are 0:24:53.800 --> 0:24:56.560 here to remind us of that, and the speed of 0:24:56.640 --> 0:24:59.280 the transition, how fast do we want to go? What 0:24:59.440 --> 0:25:02.120 does it mean for people's job Because if you were 0:25:02.160 --> 0:25:04.359 in a cool mind, you're not going to do the same. Oh, 0:25:04.440 --> 0:25:07.360 in nuclear plant, it's not the same as working windmill. 0:25:07.760 --> 0:25:10.800 How do you connect the energy that when you're able energy, 0:25:10.920 --> 0:25:16.040 you're creating what implications for the territories that's and all 0:25:16.080 --> 0:25:18.200 of them are going to be affected. So it's a 0:25:18.280 --> 0:25:21.440 it's a massive work we've we've started and I'll give 0:25:21.440 --> 0:25:23.440 you the answer next time we meet. Well, I'm but well, 0:25:23.480 --> 0:25:25.720