WEBVTT - A ‘Reasonably Optimistic’ Take on the French Election Surprise 0:00:03.120 --> 0:00:08.640 Bloomberg Audio Studios, Podcasts, radio News. 0:00:17.320 --> 0:00:21.400 Hello and welcome to another special episode of voter Nomics, 0:00:21.440 --> 0:00:26.720 the Bloomberg Podcast where politics and markets collide. I'm Stephanie Flanders, 0:00:26.720 --> 0:00:29.720 head of Economics and Government at Bloomberg, and this morning 0:00:29.760 --> 0:00:33.600 we have another historic election. A few days ago it 0:00:33.800 --> 0:00:36.839 was in the UK. This time it's in France and 0:00:37.080 --> 0:00:40.120 historic in a rather different way. We are in Paris 0:00:40.240 --> 0:00:43.800 the morning after French voters surprised the world by not 0:00:43.960 --> 0:00:48.600 granting Marine Le Penz Rassan party the largest number of 0:00:48.640 --> 0:00:53.320 seats in the French Parliament. Instead, her far right grouping 0:00:53.400 --> 0:00:56.000 came third, it looks like, and the new Popular Front 0:00:56.160 --> 0:01:02.160 on the left came first. So we have investors financial 0:01:02.240 --> 0:01:07.120 markets who were priced for a far right victory but 0:01:07.400 --> 0:01:11.800 probably a logjam in parliament. Instead we got a far 0:01:11.920 --> 0:01:17.120 left victory but probably a logjam in parliament. And so far, 0:01:17.319 --> 0:01:20.120 the way they've digested that result is to have the 0:01:20.160 --> 0:01:24.039 euro a bit weaker, but if anything, interestingly, a slight 0:01:24.600 --> 0:01:28.920 strengthening in French bonds relative to Germany. We'll see if 0:01:28.959 --> 0:01:33.080 that lasts as people start to realize quite how uncertain 0:01:33.200 --> 0:01:36.280 the future of the government is, and we're going to 0:01:36.319 --> 0:01:39.920 cut through that fog of uncertainty just a little bit 0:01:40.520 --> 0:01:43.240 over the next thirty forty minutes or so, here in 0:01:43.280 --> 0:01:47.160 the atrium of Bloomberg's Paris Bureau, with some very smart 0:01:47.360 --> 0:01:52.880 and distinguished guests from the Bloomberg Brains Trust. Starting on 0:01:52.960 --> 0:01:57.000 my far left, we have leonell Lon, known to many 0:01:57.040 --> 0:01:59.600 of you a Bloomberg opinion columnist writing about the future 0:01:59.600 --> 0:02:03.040 of money and the future of Europe, based here in Paris. 0:02:03.400 --> 0:02:08.720 And Eleonora Marvuedi, who is the economist for Bloomberg Economics, 0:02:09.360 --> 0:02:12.639 part of the economic research group that I run as 0:02:12.680 --> 0:02:17.000 part of the economics and government coverage at Bloomberg. She's 0:02:17.000 --> 0:02:19.240 also in Paris, and she's worked at pretty much all 0:02:19.280 --> 0:02:22.359 the big places OECD, Bank of England, I m F 0:02:23.280 --> 0:02:26.440 and World Bank, and joining them a very special guest 0:02:26.720 --> 0:02:30.160 who constitutes the brains Trust all when he's sitting by himself, 0:02:30.960 --> 0:02:36.079 Jean Clantrichet, obviously former European Central Bank President, Bank of 0:02:36.120 --> 0:02:38.880 France governor, long standing chair of the Group of Thirty, 0:02:39.000 --> 0:02:42.480 the Royal Institute in Brussels, and many other things. 0:02:43.320 --> 0:02:43.800 We have. 0:02:45.680 --> 0:02:48.120 A very kind audience here at what I was told 0:02:48.240 --> 0:02:51.960 was a slightly earlier hour for Parisian. So I thank 0:02:52.000 --> 0:02:53.639 you for coming in. In return, you get to ask 0:02:53.680 --> 0:02:56.680 some questions, I promise, but I must start with you. 0:02:57.600 --> 0:03:04.480 Jean Crotrichet, analyst, sent me their response to last night's 0:03:04.520 --> 0:03:08.200 results late last night with just a three word subject 0:03:08.200 --> 0:03:11.639 for the email. What a mess is that about? Right? 0:03:11.760 --> 0:03:16.960 Or should we be reassured and pleased by this outcome? 0:03:17.400 --> 0:03:20.120 I think it would have been a real mess. If 0:03:20.360 --> 0:03:24.560 the we have had an absolute majority, there would have 0:03:24.600 --> 0:03:30.200 been a total mess. If the new popular font would 0:03:30.200 --> 0:03:33.519 have had an absolute majority, it would also be really 0:03:33.639 --> 0:03:38.240 a mess. So we are in a situation where things 0:03:38.320 --> 0:03:42.240 are much better than the mess I was mentioning mess. 0:03:42.720 --> 0:03:45.480 I was mentioning that being said, of course, we have 0:03:46.040 --> 0:03:49.200 a Hong Parliament, which is a complex Hong parliament with 0:03:49.240 --> 0:03:54.920 a three third one third being clearly with a program 0:03:55.160 --> 0:03:59.119 which is very very aggressive, I would say, in some 0:03:59.160 --> 0:04:06.720 respect in terms of economic analysis, center in the second position, 0:04:07.440 --> 0:04:12.160 who we know him and we know what could be 0:04:12.240 --> 0:04:15.440 done by the Center, but he's not in the position 0:04:15.600 --> 0:04:19.240 of being the first parliamentary force. And then we have 0:04:19.360 --> 0:04:25.320 the number three, namely the extreme right. So that being said, 0:04:25.760 --> 0:04:29.080 if we were in another country, we would say, okay, 0:04:29.279 --> 0:04:32.920 let's compute. Where do we stand. Ah, we have an 0:04:32.960 --> 0:04:38.280 absolute majority center plus the Republica so I would say 0:04:38.279 --> 0:04:44.400 Republican Right and plus the Party Socialist. It's a governmental party, 0:04:44.720 --> 0:04:47.480 proved that he was able to govern France, and so 0:04:47.480 --> 0:04:51.600 of course, so why not having this kind of coalition. 0:04:52.480 --> 0:04:54.520 Of course, we are in France, we are not used 0:04:54.520 --> 0:04:58.479 to that. We are not in a position to demonstrate 0:04:58.520 --> 0:05:00.400 to our own people that it would be the right 0:05:00.440 --> 0:05:03.240 way to proceed. So we will see what happens. But 0:05:03.440 --> 0:05:09.240 it is obviously complex. Even if virtually I see this 0:05:09.360 --> 0:05:10.880 possible majority. 0:05:10.760 --> 0:05:13.640 You have all your years of experience, and then you 0:05:13.680 --> 0:05:17.360 also have your hope of what happens for France and 0:05:18.240 --> 0:05:20.719 for Europe over the next few years. As a result 0:05:20.760 --> 0:05:23.359 of this, what do you hope will happen in the 0:05:23.360 --> 0:05:25.280 next few and what do you expect to happen. 0:05:25.360 --> 0:05:31.800 As a citizen? I hope that after due meditation, discussion, 0:05:32.560 --> 0:05:37.520 assessment of the various possibilities, this idea that all taken 0:05:37.600 --> 0:05:42.520 into account, an alliance of political might that has the 0:05:42.520 --> 0:05:46.880 experience of government in France, namely the as I said, 0:05:47.120 --> 0:05:51.200 the Party Socialist, and maybe the gains. On the one hand, 0:05:51.960 --> 0:05:55.719 the republican republican right, as I said, and the Center 0:05:56.440 --> 0:06:01.440 could finally have the possibility of governing the country. It's 0:06:01.560 --> 0:06:06.920 very complex programs we are signed here and there, and 0:06:07.400 --> 0:06:10.680 I expect that it would be a long process. But 0:06:11.200 --> 0:06:14.640 in my opinion as a French citizen, it would certainly 0:06:14.720 --> 0:06:18.320 be something which would not be abnormal in comparison with 0:06:18.440 --> 0:06:23.719 all the other European democracies and would permit the country 0:06:23.800 --> 0:06:26.320 to be governed in a responsible fashion. 0:06:26.480 --> 0:06:28.840 You were saying to Francine, I think last week for 0:06:29.360 --> 0:06:34.640 Bloomberg that you didn't think the US was France was 0:06:34.720 --> 0:06:40.360 well suited to a technocratic government in the style of 0:06:40.640 --> 0:06:45.159 Monty government in all drug e governments in Italy. But 0:06:45.320 --> 0:06:48.560 that would seem to be at least one possibility coming out. 0:06:48.440 --> 0:06:54.080 Of this in politics you should never send ever, of course, nevertheless, 0:06:54.160 --> 0:06:56.400 it is not at all in the French condition. So 0:06:56.800 --> 0:07:00.159 I maintained what I told Francie. I think that it 0:07:00.240 --> 0:07:04.040 is not likely at all that we could have some 0:07:04.160 --> 0:07:08.520 kind of technocratic government in Italy. You not only had 0:07:08.640 --> 0:07:12.760 Monty and Dagie, you also had President of the Republics 0:07:13.000 --> 0:07:15.320 that we are coming from the Central Bank, and you 0:07:15.960 --> 0:07:19.080 had the succession of Prime Minister and then President of 0:07:19.120 --> 0:07:22.200 the Republic. I mean, it's it's a strong tradition in Italy, 0:07:22.480 --> 0:07:26.000 taking into account the complexity of the political life in Italy, 0:07:26.160 --> 0:07:30.240 taking also into account that there is a place in 0:07:30.320 --> 0:07:34.000 Roma where you have a very very strong techno structure, 0:07:34.280 --> 0:07:37.800 which is the Central Bank, and this is recognized by 0:07:37.840 --> 0:07:42.000 all political parties, by the people of Italy. So we 0:07:42.040 --> 0:07:45.239 are not in this position. The reason why I don't 0:07:46.080 --> 0:07:49.119 expect that we could have such but as I said, 0:07:49.240 --> 0:07:50.360 never said never, and. 0:07:50.280 --> 0:07:52.440 In your in your old jobs, you would have been 0:07:52.480 --> 0:07:56.640 particularly the ECP, you would be wondering about the fiscal 0:07:56.960 --> 0:08:00.960 financial implications of this uncertainty, and also what it tells 0:08:01.040 --> 0:08:05.080 us about the direction of French politics and what is 0:08:05.120 --> 0:08:08.680 going to be possible for President Macron or any future government. 0:08:09.040 --> 0:08:12.160 I mean, is the underlying message that this is a 0:08:12.200 --> 0:08:15.480 government that's going to borrow more and do less to 0:08:15.600 --> 0:08:19.560 get its public finances and control and less in the 0:08:19.600 --> 0:08:24.800 way of the business reforms that President Macron was supposed 0:08:24.840 --> 0:08:26.120 to be forging. 0:08:26.360 --> 0:08:29.600 First of all, I expect, of course that now that 0:08:29.640 --> 0:08:33.920 we know the result, the idea that we could embark 0:08:34.640 --> 0:08:40.640 on a program that would aggravate the situation in the 0:08:40.679 --> 0:08:45.360 fiscal side that would aggravate the situation in many respect 0:08:45.480 --> 0:08:48.720 as regards to the credit worthiness. If I may of 0:08:48.800 --> 0:08:52.520 the country would appear not being visible at all. So 0:08:52.640 --> 0:08:56.840 I expect a maturing process from now on that we 0:08:57.000 --> 0:09:03.000 know that we have the results the programs. And it 0:09:03.120 --> 0:09:06.320 was the case of the extreme right program, it's also 0:09:06.400 --> 0:09:08.760 the case of the extra of the left program, the 0:09:08.920 --> 0:09:13.360 new for popular we have their programs that are not feasible. 0:09:13.559 --> 0:09:17.720 Frankly speaking, and in my opinion, in my expert opinion, 0:09:18.080 --> 0:09:21.520 I'm speaking like an expert, not a French citizen. There 0:09:21.880 --> 0:09:24.679 I don't think at all that it would be in 0:09:24.720 --> 0:09:28.800 any respect reasonable to embark into new spendings. We have 0:09:28.880 --> 0:09:33.160 no room from a new that's my clear diagnosis. So 0:09:33.679 --> 0:09:38.000 I expect that being in a position of responsibility, we 0:09:38.080 --> 0:09:44.280 will see a dramatic realization by the which a political 0:09:44.320 --> 0:09:47.719 men and women in the question that it would be 0:09:47.880 --> 0:09:52.480 a catastrophe for the country to embark on additional massive spending. 0:09:52.679 --> 0:09:56.280 So that editation, which sounds like a warning. 0:09:56.800 --> 0:10:02.600 It's my expectations, it's my hope. Also it's a warning certainly, 0:10:02.600 --> 0:10:05.520 but the warning is there. I mean, you don't need 0:10:05.600 --> 0:10:07.840 any warning you have a situation that you have to 0:10:07.880 --> 0:10:10.120 be responsible in the situation. 0:10:10.160 --> 0:10:14.439 NL will this be taken as a warning, as an 0:10:14.440 --> 0:10:20.480 excuse or a pressure to mature, as Jean Proteiche is 0:10:20.559 --> 0:10:21.720 hoping advising. 0:10:22.080 --> 0:10:24.280 So I think what makes this a bit complicated is 0:10:24.320 --> 0:10:28.800 that even though some parties are saying that they won selection, 0:10:28.840 --> 0:10:30.600 I think it's pretty obvious that this was a vote 0:10:30.640 --> 0:10:34.040 against the penn a vote against certain scenarios, but it 0:10:34.080 --> 0:10:36.800 was not for anyone. Nobody has an absolute majority, so 0:10:36.840 --> 0:10:39.640 I think it's frankly exaggerated to imagine as you hear 0:10:39.720 --> 0:10:41.800 some on the far left immediately saying, this is a 0:10:41.840 --> 0:10:44.640 vote for our program. So I think programs are going 0:10:44.679 --> 0:10:46.079 to have to be fluid. I think there's no way 0:10:46.080 --> 0:10:50.040 of getting around it. I also think that my hope 0:10:50.520 --> 0:10:55.360 is that given the kind of extraordinary cynicism almost of 0:10:55.400 --> 0:10:58.040 the way so these coalitions were constructed, whether it is 0:10:58.080 --> 0:11:00.760 the far left, which was a real idea logical rainbow 0:11:00.800 --> 0:11:04.880 that was frankly almost untenable, and also in the center 0:11:04.960 --> 0:11:07.520 with this tactical voting in the middle, I am hopeful 0:11:07.559 --> 0:11:09.800 that there is going to have to be some reckoning 0:11:10.080 --> 0:11:12.440 on the program that comes out of a future coalition. 0:11:12.960 --> 0:11:16.319 There are the numbers for something approaching I don't want 0:11:16.360 --> 0:11:19.440 to jinx it. That's something like starmerism, where you have 0:11:19.559 --> 0:11:23.200 the Center plus the Greens and the Socialists. The numbers 0:11:23.240 --> 0:11:26.240 are there, even if the spirit may not be. So 0:11:26.760 --> 0:11:29.960 I think there is scope to imagine extremes being turned down. 0:11:31.120 --> 0:11:36.720 My concern is that the campaign itself was really not 0:11:36.760 --> 0:11:39.280 what I would consider to be a good campaign. It 0:11:39.360 --> 0:11:42.040 was full of I mean, even setting aside the whole 0:11:42.120 --> 0:11:44.720 fake news, there was fake history. There was lots of 0:11:44.760 --> 0:11:47.160 strange calls to you felt like you were voting for 0:11:47.200 --> 0:11:49.520 the nineteen thirty of the nineteen forties or nineteen eighties. 0:11:49.679 --> 0:11:52.160 There was a very little discussion about policy. So I 0:11:52.160 --> 0:11:54.800 think we may get into a situation where the reckoning 0:11:54.880 --> 0:11:57.559 of the parties and the elites comes a bit quicker 0:11:57.600 --> 0:12:01.439 than the reckoning for the voters. It could be quite unstable, 0:12:01.920 --> 0:12:04.480 and yes it may not last more than a year 0:12:04.480 --> 0:12:06.200 when it comes time to put a budget together. But 0:12:06.280 --> 0:12:08.960 right now I'm definitely more hopeful than I was a couple. 0:12:08.840 --> 0:12:09.240 Of days ago. 0:12:09.360 --> 0:12:11.079 Well, that's interesting about where we could be in a 0:12:11.160 --> 0:12:12.640 year's time, which I want to go to in a minute. 0:12:12.679 --> 0:12:15.240 But eleanor just to say that paint the scene for 0:12:15.320 --> 0:12:18.000 us a little bit about how much leeway there would be. 0:12:18.200 --> 0:12:22.400 I mean, Jean Claude is suggesting that the reality will 0:12:22.440 --> 0:12:26.079 become quite clear that they would be unable to implement 0:12:26.360 --> 0:12:31.360 certainly seriously expensive policies for the year. But what is 0:12:31.400 --> 0:12:34.080 the situation that France is in and how much room 0:12:34.120 --> 0:12:35.240 for maneuver is there. 0:12:35.120 --> 0:12:39.600 On that food Well, the situation is France's public finances 0:12:39.600 --> 0:12:43.320 are strained, that is, high, deficit is widen, interest payments 0:12:43.320 --> 0:12:47.920 are increasing. It's already considered to be under the excessive 0:12:48.200 --> 0:12:49.360 deficit procedure of the. 0:12:49.800 --> 0:12:54.800 EU, violating the borrowing rules of the European Union exactly. 0:12:54.840 --> 0:12:58.520 So deficit is lower than it's higher than three percent 0:12:58.679 --> 0:13:03.640 and debt is increasing. So the previous government or still 0:13:03.840 --> 0:13:09.439 current government this morning, has put together a very ambitious 0:13:09.440 --> 0:13:12.760 program to try to tackle these problems and decrease a 0:13:12.760 --> 0:13:16.040 deficit by twenty twenty seven and comply partially with their rules. 0:13:16.400 --> 0:13:19.120 This being highly questioned because it's very ambitious, but it 0:13:19.320 --> 0:13:22.360 was always the right direction. Now our viue is which 0:13:23.320 --> 0:13:26.720 whichever coalision or type of government comes in power, there 0:13:26.800 --> 0:13:30.680 is likely little effort to do any physical consolidation. So 0:13:30.840 --> 0:13:34.440 the best will stay at the current baseline, which already 0:13:34.559 --> 0:13:40.640 violates in the US. Now in the case of left 0:13:40.760 --> 0:13:45.000 centric government, likely the sent the left willing systems some 0:13:45.080 --> 0:13:47.560 fiscal spending, but it will have to be much more 0:13:48.360 --> 0:13:53.560 moderate than the full NFP program. So for example, what 0:13:53.600 --> 0:13:56.079 we estimate the NFP program could cost almost three percent 0:13:56.120 --> 0:14:00.400 of GDP annually, and that would be the freeze the 0:14:00.400 --> 0:14:03.959 deficits substantially by six bringing it to six point two 0:14:03.960 --> 0:14:08.559 percent by twenty twenty seven, far away from the roofs. 0:14:08.760 --> 0:14:11.320 So we if the spending is down to zero point 0:14:11.320 --> 0:14:15.120 five percent of GDP, still that will have keep the 0:14:15.120 --> 0:14:18.320 deficit wider than three percent and increase the debt to GDP. 0:14:18.960 --> 0:14:22.160 So overall, although there is a little room for any 0:14:22.480 --> 0:14:26.640 any fiscal spending, there is likely that there would be 0:14:26.680 --> 0:14:28.840 some to keep everybody having a codition. 0:14:36.240 --> 0:14:40.040 Bringing this grouping together and the kind of coalition building 0:14:40.120 --> 0:14:42.720 or the sort of alliance that was forged last week. 0:14:43.120 --> 0:14:47.320 Quite a few of mcfar's reforms were already put on hold, 0:14:47.320 --> 0:14:50.000 including the pension reform. I mean, if you are you're 0:14:50.000 --> 0:14:55.520 in the business community wondering about the underlying potential of France, 0:14:55.600 --> 0:14:58.160 and so it's not One of the most important things 0:14:58.200 --> 0:15:00.120 is sort of the long term, long term growth and 0:15:00.160 --> 0:15:04.680 what that enables. Should that be the concern that even 0:15:04.720 --> 0:15:08.640 with the maturing, even without expensive price tax, you won't 0:15:08.640 --> 0:15:10.240 get difficult reforms either. 0:15:10.400 --> 0:15:13.000 What I have to recognize is that during the seven 0:15:13.080 --> 0:15:19.160 years of Macro and successive governments, we had quite good 0:15:19.840 --> 0:15:24.680 policy as regards the micro economics. The I would say 0:15:24.760 --> 0:15:29.240 attractiveness of the country, the new investment and so forth. 0:15:29.640 --> 0:15:33.880 The diminishing of the unemployment has been quite spectacular. So 0:15:34.520 --> 0:15:40.200 this part of the policies were in my opinion, very 0:15:40.280 --> 0:15:43.400 much on the positive side. The problem was the I 0:15:43.400 --> 0:15:47.720 would say, public spendings. What you just said, the way 0:15:48.600 --> 0:15:53.840 we are not respecting the rules of Europe and also 0:15:54.280 --> 0:15:58.480 the companies and with other countries that we're behaving quite 0:15:58.560 --> 0:16:02.280 properly because they had a crisis after demand bother. So 0:16:02.640 --> 0:16:06.960 that makes a mixed picture. If I may, it would 0:16:07.000 --> 0:16:10.960 be in my opinion, extremely bad. Taking into account the 0:16:11.000 --> 0:16:17.080 starting point to have additional new spendings, you could imagine 0:16:17.600 --> 0:16:20.880 to have some kind of measures that we will not 0:16:21.000 --> 0:16:25.240 be new spendings, but we would give certain satisfaction to 0:16:25.800 --> 0:16:32.520 what I would say, qualify a Republican responsibility responsibilible left 0:16:33.400 --> 0:16:37.000 and you see what I mean there. So it seems 0:16:37.000 --> 0:16:40.440 to me that it's not totally impossible not to aggravate 0:16:40.880 --> 0:16:44.720 the situation, which would be in any case very very bad, 0:16:44.800 --> 0:16:48.200 because again, there is no home for maneuvering. And I 0:16:48.320 --> 0:16:51.480 expect that the realization that there is no room for 0:16:51.520 --> 0:16:58.080 maneuvering will progressively permit all the political parties leadership to 0:16:58.480 --> 0:17:03.240 understand that they have no room for manewary, whatever their affiliation, 0:17:04.359 --> 0:17:08.399 and including when they have signed a program on the 0:17:08.480 --> 0:17:14.880 left side which is obviously extraordinay ball and obviously extraordinary 0:17:14.960 --> 0:17:19.560 out of the situation taking into account again the starting point. 0:17:19.960 --> 0:17:22.679 Yes, So eleanor do you think in terms of just 0:17:22.720 --> 0:17:26.680 the cost of the micro slippage and the macro slippage. 0:17:26.960 --> 0:17:29.159 Well, I think that if we look at the program 0:17:29.160 --> 0:17:32.080 in the NFP, there is a lot of suggestion to 0:17:32.200 --> 0:17:38.840 increased spending on public services, to increase transfers, also reversed 0:17:38.880 --> 0:17:43.360 the pension reform and partially will be funded by increased axis. 0:17:43.640 --> 0:17:45.359 What we see is that, yeah, there will be some 0:17:45.440 --> 0:17:48.119 bushting and GDP in the short term because of increased 0:17:48.160 --> 0:17:51.600 pending there's no parts on investments that will have longer 0:17:51.680 --> 0:17:55.640 term impacts on the potential. Also, a reversal of the 0:17:55.680 --> 0:17:58.720 pension reform and increasing labor costs could also harm the 0:17:58.840 --> 0:18:04.040 labor supply. The other potsop is that they clearly stated 0:18:04.040 --> 0:18:06.520 they're not willing to comply with the austerity rules of 0:18:06.560 --> 0:18:09.760 the EU. So to what extent the whole NFB will 0:18:09.800 --> 0:18:13.240 stand behind this statement will determine how much they will 0:18:13.280 --> 0:18:14.320 moderate their policies. 0:18:14.560 --> 0:18:17.439 I mean, the worry would be that a majority of 0:18:17.480 --> 0:18:21.840 the French people have voted for radical, extreme solutions of 0:18:21.880 --> 0:18:25.760 one kind or another last night, and if we end 0:18:25.840 --> 0:18:30.920 up with a quote unquote reassuring combination, which is matured, 0:18:31.080 --> 0:18:33.720 which is realized, there's no room for maneuver on many 0:18:33.760 --> 0:18:37.159 of these things. The risk is that the French voters 0:18:37.240 --> 0:18:39.720 draw the conclusion that they have to vote even more 0:18:39.760 --> 0:18:42.679 emphatically for extreme because they've just ended up with the 0:18:42.720 --> 0:18:45.160 same thing they didn't the one thing they didn't want 0:18:45.560 --> 0:18:48.479 was a continuation of what they had. Would be the argument, 0:18:48.600 --> 0:18:51.040 I mean, Leonel, what are the risks of. 0:18:51.080 --> 0:18:56.560 That they're obviously present? That's true, I think though that 0:18:56.920 --> 0:18:59.520 I mean, it's interesting to me that certain figures are 0:18:59.520 --> 0:19:03.600 making it come back. Francois Land, who arguably pushed through 0:19:03.640 --> 0:19:06.240 some of the reforms that Macworn benefited from, has now 0:19:06.280 --> 0:19:08.560 made a kind of political comeback of sorts and is 0:19:08.600 --> 0:19:11.399 even speaking out against me in Oshal, telling him to 0:19:11.440 --> 0:19:13.640 keep quiet for for the sake of the left. Now, 0:19:13.760 --> 0:19:15.960 obviously the left has changed, and I don't think it 0:19:16.000 --> 0:19:19.400 would be the same kind of left if Hansoiland was 0:19:19.480 --> 0:19:21.439 to get a position of power. But I think the 0:19:21.440 --> 0:19:23.919 constraints that we're talking about are real, they will be felt. 0:19:24.720 --> 0:19:28.840 Maybe this this technocratic idea, even if a technocratic government 0:19:28.920 --> 0:19:31.560 is definitely not on the cards and not a normal 0:19:31.560 --> 0:19:35.320 French solution, it would be interesting to me if certain positions, 0:19:35.760 --> 0:19:37.960 if there was a desire to reach out and find 0:19:38.040 --> 0:19:42.240 certain a political figures, maybe former central bank governments I 0:19:42.240 --> 0:19:44.919 don't know present company accepted, but people who do have 0:19:44.960 --> 0:19:49.480 credibility in certain areas like the economy, to ease some 0:19:49.560 --> 0:19:53.359 of these tensions, because even beyond fiscal spending, there are 0:19:53.359 --> 0:19:58.280 deep seated problems in France productivity, innovation, demographics. I mean, 0:19:58.560 --> 0:20:01.040 these are these are real and if we have no 0:20:01.119 --> 0:20:04.040 ambition and it's just a government of convenience, that says 0:20:04.520 --> 0:20:07.359 let's cut here and spend a bit there, We're not 0:20:07.359 --> 0:20:09.399 going to solve it. So I hope again, my hope 0:20:09.440 --> 0:20:12.240 is that at some point the politics does have to 0:20:12.280 --> 0:20:14.040 take a bike a step back on some areage. 0:20:14.080 --> 0:20:18.560 I guess strong plot. We should just check it. You available, No, 0:20:19.560 --> 0:20:21.840 I noticed that you are almost exactly the same age 0:20:21.840 --> 0:20:29.400 as Joe Biden. For you, don't you think that there 0:20:29.440 --> 0:20:31.919 has to be some I mean, if you would say, 0:20:32.720 --> 0:20:35.600 and I think that Marie Napenn would say this, and 0:20:35.640 --> 0:20:37.760 indeed we should remember she got the same share of 0:20:37.760 --> 0:20:42.959 the vote as Kastama's Labor Party. People have voted for change, 0:20:43.280 --> 0:20:45.840 and if you're trying to respond to that and trying 0:20:45.920 --> 0:20:48.840 to prevent a move to the extremes, whether it's in 0:20:48.880 --> 0:20:52.080 a year or an extreme government within a year or 0:20:52.119 --> 0:20:56.680 within three years. Is the lesson of this that at 0:20:56.760 --> 0:20:58.840 some level there has to be a shift to the left. 0:20:58.840 --> 0:21:00.879 I mean, that's partly what leone saying. I mean, what 0:21:00.920 --> 0:21:07.879 would be a symbolic but significant move that could be 0:21:07.960 --> 0:21:11.119 made as that sort of olive branch to the voters 0:21:11.160 --> 0:21:13.960 who actually feel something has to change. 0:21:13.760 --> 0:21:17.200 The main problem is that, as we said, the country 0:21:17.480 --> 0:21:22.159 looks like being divided in three thirds, and two of 0:21:22.240 --> 0:21:25.920 the extreme thirds are totally at odds. So we are 0:21:25.960 --> 0:21:28.639 not in a situation where you can say the people 0:21:28.680 --> 0:21:33.000 wants changes and we will give them changes, because the 0:21:33.119 --> 0:21:37.959 changes in question are exactly at the opposite on major, 0:21:38.240 --> 0:21:43.840 major major points. So we are bound. And it's more 0:21:44.200 --> 0:21:46.760 one of the first time with the Fifth Republic to 0:21:46.960 --> 0:21:51.440 find out a way to get from that position. And 0:21:51.840 --> 0:21:55.040 my hope, as I said, is that if you take 0:21:55.240 --> 0:22:01.840 the Republican component of the Parliament, you have the theoretical 0:22:01.960 --> 0:22:07.040 possibility of having something which would be representative of the 0:22:07.080 --> 0:22:10.760 people because it represents something like a little bit more 0:22:11.000 --> 0:22:13.840 than the absolute majority when you add up to the 0:22:13.960 --> 0:22:17.760 Republicans on the one hand, and the Socialist Party is 0:22:17.800 --> 0:22:22.119 said to oversimplify on the other hand. So again everybody 0:22:22.160 --> 0:22:26.719 now has to reflect mature, as I said, make up 0:22:26.760 --> 0:22:29.720 his mind, not only of course, the leadership of the 0:22:29.720 --> 0:22:33.080 political parties, but the people of France. The people of France, 0:22:33.160 --> 0:22:35.880 they are not stupid. They prove that they were not stupid. 0:22:36.119 --> 0:22:39.520 They want to changes, but not to that extreme that 0:22:39.600 --> 0:22:42.920 they would have rocked totally the boat. So they might 0:22:43.000 --> 0:22:48.480 reflect themselves on what is happening and I also would 0:22:48.520 --> 0:22:52.879 bet on the common sense and the responsible I would say, 0:22:52.920 --> 0:22:56.240 attitude of our own Fero citizens. 0:22:56.480 --> 0:22:58.960 Leona, what do you think of the solution, particularly bringing 0:22:58.960 --> 0:23:02.520 with the Republicans who were not necessarily the great winners 0:23:02.520 --> 0:23:05.640 of last night's election. How do you think that people 0:23:05.640 --> 0:23:06.560 would respond to that? 0:23:07.000 --> 0:23:07.760 I think it's tough. 0:23:08.119 --> 0:23:10.360 I do wonder though, what if we had to find 0:23:10.359 --> 0:23:12.639 a lowest common denominator between all of these parties, what 0:23:12.680 --> 0:23:15.240 would it be? I mean, I think clearly taxation, right, 0:23:15.280 --> 0:23:17.159 taxes are going up, there's going to have to be 0:23:17.200 --> 0:23:19.840 some kind of concession right on on the wealth tax, 0:23:21.000 --> 0:23:23.200 on you know, some of the some of the tax 0:23:23.359 --> 0:23:28.399 proposals on on reforms. I just can't see the pension 0:23:28.440 --> 0:23:31.560 reform being rolled back. But already Gabriel Attal who's proven 0:23:31.600 --> 0:23:35.440 to be the comeback kid and the real political discovery 0:23:35.440 --> 0:23:39.359 of this, of this whole saga, because he has fecually 0:23:39.400 --> 0:23:42.040 broken with Maccorn, emancipating himself from Macorn to build this 0:23:42.400 --> 0:23:45.080 potentially this coalition. And he was the one apparently who 0:23:45.160 --> 0:23:48.439 said well let's let's suspend this welfare benefit reformers as 0:23:48.440 --> 0:23:50.840 a gest to the left. So there are gestures to 0:23:50.840 --> 0:23:54.840 make I think even even with with with le Penn 0:23:54.920 --> 0:23:57.600 there was it wasn't even extreme change, right. The whole 0:23:57.600 --> 0:24:00.600 bet was that there'd be some melonification, that she would 0:24:00.600 --> 0:24:03.280 be surrounded by experts and technocrats and it wouldn't be 0:24:03.280 --> 0:24:05.600 the extreme. Well, I think now we have to accept that. 0:24:05.640 --> 0:24:07.240 You know, there's a Maloney scenario on the right and 0:24:07.240 --> 0:24:09.880 there's a Starmer scenario on the left. And the real 0:24:09.960 --> 0:24:12.520 fight over the next few days is to see what 0:24:12.520 --> 0:24:15.240 what will it take, How how aggressively will sparks fly 0:24:15.840 --> 0:24:19.560 to carve off the Republican left from Minoshal. That's the 0:24:19.680 --> 0:24:20.160 that's the fight. 0:24:20.359 --> 0:24:23.440 Do you see individual figures coming out of this, whether 0:24:23.480 --> 0:24:29.320 it's Gabriel Lettel or Lusman. Do you identify future leaders 0:24:29.320 --> 0:24:32.399 of some kind of coalition in the current spectrum? 0:24:32.920 --> 0:24:35.160 You mean the new prime ministry. 0:24:35.200 --> 0:24:37.960 Well in terms of but also in terms of being 0:24:38.000 --> 0:24:42.119 a potential rallying point for some kind of I mean 0:24:42.160 --> 0:24:45.080 the discussion that the phrase was parliamentary arc but I 0:24:45.080 --> 0:24:48.720 mean not just for the bargaining now, but also as 0:24:48.720 --> 0:24:52.560 a potential candidate in four years time. I mean that's 0:24:52.600 --> 0:24:53.960 also something we're looking for. 0:24:54.800 --> 0:24:57.880 Are we not pronounced on the countdates? Three years time 0:24:57.960 --> 0:25:01.040 or two years and a half, would not embark on 0:25:01.280 --> 0:25:05.360 any kind of I would say speculation on the way 0:25:05.400 --> 0:25:08.720 it will proceed, but at a time after sufficient maturing 0:25:08.840 --> 0:25:11.080