1
00:00:00,240 --> 00:00:03,120
Speaker 1: Brought to you by Bank of America. Merrill Lynch. Seeing

2
00:00:03,120 --> 00:00:05,600
Speaker 1: what others have seen, but uncovering what others may not.

3
00:00:06,000 --> 00:00:09,680
Speaker 1: Global Research that helps you Harness disruption voted top global

4
00:00:09,720 --> 00:00:13,000
Speaker 1: research from five years running Meryll Lynch, Pierce, Fenner, and

5
00:00:13,080 --> 00:00:15,600
Speaker 1: Smith Incorporated. One of the highlights of this week for

6
00:00:15,640 --> 00:00:18,680
Speaker 1: me was going with my family to eat at La

7
00:00:18,760 --> 00:00:22,360
Speaker 1: Madalen for dinner, which is a chain of French restaurants

8
00:00:22,360 --> 00:00:26,239
Speaker 1: in the United States. It's almost They had a chicken

9
00:00:26,400 --> 00:00:29,400
Speaker 1: creep that sounds lovely, and one of my daughters had

10
00:00:29,440 --> 00:00:31,880
Speaker 1: a grilled cheese sand which they really don't vary the

11
00:00:31,960 --> 00:00:44,920
Speaker 1: children's menu restaurants. Hello, and welcome back to Bloomberg Benchmark

12
00:00:45,080 --> 00:00:48,920
Speaker 1: show about the Global Economy. I'm Scott landman and economics

13
00:00:49,000 --> 00:00:52,160
Speaker 1: editor with Bloomberg News in Washington, and I'm Kate Smith,

14
00:00:52,200 --> 00:00:55,680
Speaker 1: an editor with Bloomberg in New York. So, Kate, are

15
00:00:55,760 --> 00:00:59,400
Speaker 1: are you much of a Franco file? Um? You know,

16
00:00:59,440 --> 00:01:02,360
Speaker 1: I've never really been to France, which is a little embarrassing,

17
00:01:02,600 --> 00:01:05,559
Speaker 1: I know, right, But I think everything I've heard about

18
00:01:05,560 --> 00:01:08,280
Speaker 1: French culture, I don't see why I wouldn't like it,

19
00:01:08,319 --> 00:01:12,280
Speaker 1: you know, like the that gets the coffees, the striped shirts,

20
00:01:12,880 --> 00:01:15,880
Speaker 1: the berets. There's a lot to like there, there's a

21
00:01:15,880 --> 00:01:19,240
Speaker 1: lot to like. I've been I've been to France once,

22
00:01:19,319 --> 00:01:22,400
Speaker 1: just for a couple of days, but I don't speak French.

23
00:01:22,560 --> 00:01:24,560
Speaker 1: And you know, one of the highlights of this week

24
00:01:24,600 --> 00:01:27,160
Speaker 1: for me was going with my family to eat at

25
00:01:27,640 --> 00:01:30,760
Speaker 1: La Madalene for dinner, which is a chain of French

26
00:01:30,840 --> 00:01:35,360
Speaker 1: restaurants in the United States. It's almost had a chicken

27
00:01:35,520 --> 00:01:38,560
Speaker 1: creep that sounds lovely, and one of my daughters had

28
00:01:38,560 --> 00:01:41,520
Speaker 1: a grilled cheese sandwich. They really don't vary the children's

29
00:01:41,560 --> 00:01:45,360
Speaker 1: menu in restaurants. That sounds a lot better than the

30
00:01:45,720 --> 00:01:48,520
Speaker 1: sad desk salad that's awaiting me in a few minutes

31
00:01:48,600 --> 00:01:52,279
Speaker 1: after Well. Anyway, that kind of leads into our topic

32
00:01:52,360 --> 00:01:55,120
Speaker 1: for today. You know, you go back to June this year,

33
00:01:55,160 --> 00:01:58,160
Speaker 1: the voters of the United Kingdom gave us Brexit. Then

34
00:01:58,360 --> 00:02:02,760
Speaker 1: Americans decided to elect Donald Trump as president. Now, over

35
00:02:02,760 --> 00:02:05,160
Speaker 1: the next few months, the world is going to turn

36
00:02:05,240 --> 00:02:07,920
Speaker 1: its eyes to France, and they already are in some ways.

37
00:02:07,960 --> 00:02:10,400
Speaker 1: It's it's the sixth biggest economy in the world and

38
00:02:10,400 --> 00:02:14,200
Speaker 1: the third largest in Europe, and it's where a rising

39
00:02:14,320 --> 00:02:19,200
Speaker 1: anti establishment, anti immigrant movement is threatening to deliver another

40
00:02:19,400 --> 00:02:22,360
Speaker 1: blow to those smug global elites who think they know

41
00:02:22,480 --> 00:02:25,960
Speaker 1: it all. Oh man, that the smug global elites, right, Scott,

42
00:02:27,760 --> 00:02:29,840
Speaker 1: they got it coming again. I know, I know, it's

43
00:02:29,840 --> 00:02:32,240
Speaker 1: not just the coastal elites this times, the global elites.

44
00:02:32,320 --> 00:02:36,680
Speaker 1: All right. Well, it's true though, populist anti immigrant movements

45
00:02:36,680 --> 00:02:39,720
Speaker 1: are really they're really gaining a lot of traction across Europe,

46
00:02:39,840 --> 00:02:43,200
Speaker 1: and in France, the National Front, and that's led by Leapin,

47
00:02:43,520 --> 00:02:46,680
Speaker 1: a forty eight year old lawyer by training. She's one

48
00:02:46,680 --> 00:02:50,359
Speaker 1: of the prime examples. She's pledged that if she's elected president,

49
00:02:50,680 --> 00:02:53,040
Speaker 1: she would take the country out of the European Union

50
00:02:53,320 --> 00:02:58,920
Speaker 1: and the eurocurrency and resurrect France's borders. Economic conditions in

51
00:02:59,080 --> 00:03:03,080
Speaker 1: France are are running in her favor. You've got unemployment

52
00:03:03,120 --> 00:03:05,600
Speaker 1: around ten percent, which is close to a record high.

53
00:03:05,919 --> 00:03:09,040
Speaker 1: The nation's reeling from a series of terror attacks over

54
00:03:09,080 --> 00:03:12,919
Speaker 1: the past year, the migrant crisis of straining Europe. Although

55
00:03:12,960 --> 00:03:15,720
Speaker 1: even with those things, she still isn't actually favor to

56
00:03:15,760 --> 00:03:19,200
Speaker 1: win the French election. But then again, neither were the

57
00:03:19,280 --> 00:03:22,200
Speaker 1: pro Brexit crowd or Trump. And you know, here's another

58
00:03:22,280 --> 00:03:26,600
Speaker 1: great parallel, Lapen is In, another admirer of Russian President

59
00:03:26,680 --> 00:03:30,280
Speaker 1: Vladimir Putin, just like Trump, and both have expressed doubts

60
00:03:30,320 --> 00:03:33,600
Speaker 1: about climate change being caused by humans. Leapin is called

61
00:03:33,639 --> 00:03:38,120
Speaker 1: globalization and I quote another kind of totalitarianism. Joining us

62
00:03:38,120 --> 00:03:41,840
Speaker 1: now to explain the situation in France is Nicolas Veron,

63
00:03:42,240 --> 00:03:45,320
Speaker 1: a former French government advisor who's a scholar at both

64
00:03:45,360 --> 00:03:49,440
Speaker 1: the Brugal think Tank in Brussels and the Peterson Institute

65
00:03:49,480 --> 00:03:53,800
Speaker 1: for International Economics in Washington. He joins us from neither

66
00:03:53,880 --> 00:03:56,440
Speaker 1: of those cities, but actually is in London and stopped

67
00:03:56,440 --> 00:03:59,720
Speaker 1: by our office today. Nicholas, thanks for coming on our show.

68
00:04:00,040 --> 00:04:03,040
Speaker 1: Thanks for having me. So can you first tell us

69
00:04:03,080 --> 00:04:06,320
Speaker 1: a bit about how the National Front got started and

70
00:04:06,360 --> 00:04:09,800
Speaker 1: how Marine Lepine has gone from someone at the fringes

71
00:04:09,920 --> 00:04:12,680
Speaker 1: to someone with what seems like a legitimate chance of

72
00:04:12,760 --> 00:04:17,320
Speaker 1: becoming Francis leader. I think in comparison with Brexit and Trump,

73
00:04:17,920 --> 00:04:21,839
Speaker 1: I think it's important to get the right perspective of

74
00:04:22,279 --> 00:04:25,080
Speaker 1: time and the National Front is not the new movement.

75
00:04:25,160 --> 00:04:28,240
Speaker 1: It didn't appear in the last few years, let alone

76
00:04:28,320 --> 00:04:31,880
Speaker 1: the last few months. It's been around for more than

77
00:04:31,920 --> 00:04:36,520
Speaker 1: thirty years very prominent in the French political landscape, founded

78
00:04:36,560 --> 00:04:41,680
Speaker 1: by Marine Lepine's father, Jean Marie lepan Um, who actually

79
00:04:42,240 --> 00:04:46,680
Speaker 1: made it into a significant political party in the early eighties,

80
00:04:47,240 --> 00:04:49,760
Speaker 1: and Jean Marri Lupin also made it to the second

81
00:04:49,839 --> 00:04:54,960
Speaker 1: round of the French presidential election in April two thousand

82
00:04:55,000 --> 00:04:59,440
Speaker 1: and two, uh to general surprise, he was soundly defeated

83
00:04:59,480 --> 00:05:01,640
Speaker 1: in the second round by Jack At the time, but

84
00:05:01,720 --> 00:05:05,159
Speaker 1: this was a big shock, not unlike what we've seen

85
00:05:05,279 --> 00:05:07,720
Speaker 1: this year in the UK and the US, so it's

86
00:05:07,760 --> 00:05:10,599
Speaker 1: not like we have an entirely new phenomenon. But it

87
00:05:10,800 --> 00:05:14,520
Speaker 1: is also the case that Marion Leapin uh so, the

88
00:05:14,560 --> 00:05:19,440
Speaker 1: party founder's daughter, is a very talented politician in her

89
00:05:19,520 --> 00:05:24,159
Speaker 1: own right, has built momentum for her party with strategies

90
00:05:24,200 --> 00:05:27,279
Speaker 1: that are uh as that have parles with those of

91
00:05:27,320 --> 00:05:33,320
Speaker 1: her father, but also have differences. And uh Indeed, I

92
00:05:33,360 --> 00:05:36,520
Speaker 1: wouldn't expect her to win the election next year, but

93
00:05:36,760 --> 00:05:39,560
Speaker 1: nor did I expect Mr Trump to win the US elections,

94
00:05:39,600 --> 00:05:43,120
Speaker 1: So you shouldn't take my opinion for guidance, Nicholas. Let

95
00:05:43,200 --> 00:05:46,040
Speaker 1: me let's back up for just a moment. How exactly

96
00:05:46,120 --> 00:05:51,080
Speaker 1: does the French presidential election work right. Um, So the

97
00:05:51,160 --> 00:05:55,040
Speaker 1: short answer is it's a two round elections. The two

98
00:05:55,120 --> 00:05:57,479
Speaker 1: rounds are separated by two weeks, so we have a

99
00:05:57,480 --> 00:06:01,200
Speaker 1: first round in late April, second round in early May,

100
00:06:01,240 --> 00:06:04,760
Speaker 1: and in the meantime people make up their minds on

101
00:06:04,880 --> 00:06:07,400
Speaker 1: how they want to voot on the second round. With

102
00:06:07,600 --> 00:06:10,400
Speaker 1: just two candidates, there cannot be more than two in

103
00:06:10,480 --> 00:06:13,280
Speaker 1: the second round. In the first round there can be

104
00:06:13,360 --> 00:06:15,840
Speaker 1: many candidates, and we don't know yet exactly how many,

105
00:06:15,920 --> 00:06:20,159
Speaker 1: but it's probably a dozen or more. So the saying

106
00:06:20,160 --> 00:06:24,279
Speaker 1: in Frances, in the first round people choose whoever they

107
00:06:24,320 --> 00:06:29,080
Speaker 1: like most. In the second round, the eliminate whoever the

108
00:06:29,760 --> 00:06:33,040
Speaker 1: like least. And I think this is likely to apply

109
00:06:33,160 --> 00:06:36,720
Speaker 1: to the election next year. Even so, there are also

110
00:06:36,880 --> 00:06:42,960
Speaker 1: strategic French voters, typically very politically aware, so there some

111
00:06:43,080 --> 00:06:46,359
Speaker 1: will also have tactical or strategic considerations in their voting

112
00:06:46,360 --> 00:06:48,719
Speaker 1: patterns because they wants this also candidate to make it

113
00:06:48,760 --> 00:06:52,160
Speaker 1: to the second round rather than the ones they prefer.

114
00:06:52,320 --> 00:06:55,279
Speaker 1: In absolute terms, that is that a straight popular vote

115
00:06:55,320 --> 00:06:58,800
Speaker 1: in both rounds. Nationwide, Yeah, I think only the US

116
00:06:58,880 --> 00:07:02,960
Speaker 1: has this uh very bizarre system with the electoral college.

117
00:07:03,360 --> 00:07:06,240
Speaker 1: For the first time ever, we have primaries boots for

118
00:07:06,320 --> 00:07:09,560
Speaker 1: the mainstream central right party and for the mainstream central

119
00:07:09,600 --> 00:07:16,280
Speaker 1: left parties. Now, this process of primaries is unprecedented, being

120
00:07:16,320 --> 00:07:20,680
Speaker 1: on the two sides, and means that there are actually

121
00:07:20,760 --> 00:07:24,360
Speaker 1: multiple scenarios for the election, Because I believe it or not,

122
00:07:24,440 --> 00:07:27,720
Speaker 1: there are two rounds of voting for each of the primaries,

123
00:07:27,720 --> 00:07:29,840
Speaker 1: so two rounds for the center right, two rounds for

124
00:07:29,880 --> 00:07:33,679
Speaker 1: the central left, and all these are national votes, so

125
00:07:33,920 --> 00:07:36,760
Speaker 1: we'll get six rounds of voting before we know the

126
00:07:36,840 --> 00:07:39,600
Speaker 1: name of the president, which means that it's very difficult

127
00:07:39,600 --> 00:07:45,880
Speaker 1: to predict exactly where the equation will be for French voters.

128
00:07:45,920 --> 00:07:50,679
Speaker 1: There is also an expectation that important candidates may pop

129
00:07:50,760 --> 00:07:53,440
Speaker 1: up who are neither the center right winner of the

130
00:07:53,480 --> 00:07:56,440
Speaker 1: primary north or central left winner of the primary norm

131
00:07:56,520 --> 00:08:00,800
Speaker 1: Mrs Lupin for example, Emmanuel Macron, a former economics minister,

132
00:08:01,640 --> 00:08:06,600
Speaker 1: is a young, extremely talented politician who is fairly disruptive

133
00:08:06,800 --> 00:08:10,000
Speaker 1: and has just announced the candidacy of his own and

134
00:08:10,040 --> 00:08:12,960
Speaker 1: frankly he has a chance to make it to the

135
00:08:13,000 --> 00:08:17,960
Speaker 1: second round on current expectations. So this is very unpredictable election.

136
00:08:18,280 --> 00:08:22,240
Speaker 1: Lots of resentment against the establishment, also lots of fear

137
00:08:22,280 --> 00:08:26,320
Speaker 1: of chance in France and ambiguity about chance, a change

138
00:08:26,320 --> 00:08:31,640
Speaker 1: in globalizations and the European environment and social and economic

139
00:08:31,720 --> 00:08:35,760
Speaker 1: dynamics influence itself very difficult to know what will come

140
00:08:35,800 --> 00:08:38,720
Speaker 1: out of it. So just a clarify necklace. So exactly

141
00:08:38,760 --> 00:08:41,080
Speaker 1: what has to happen for the pen herself to win?

142
00:08:41,240 --> 00:08:43,719
Speaker 1: I mean, so there's obviously no electoral college, and it's

143
00:08:43,720 --> 00:08:46,600
Speaker 1: just it's just a simple popular vote and that can

144
00:08:46,600 --> 00:08:48,839
Speaker 1: win the election. And who does it depend on who

145
00:08:48,880 --> 00:08:51,840
Speaker 1: the opponent is too? Could she actually win if there's

146
00:08:51,840 --> 00:08:53,920
Speaker 1: a weak opponent or is it likely to produced the

147
00:08:53,960 --> 00:08:57,360
Speaker 1: strongest opponent? Yeah, so she will be the candidate date

148
00:08:57,440 --> 00:09:00,280
Speaker 1: of her party is the National Front. In the first round,

149
00:09:00,559 --> 00:09:03,520
Speaker 1: there will be as I said, a number of other

150
00:09:03,600 --> 00:09:08,560
Speaker 1: candidates in the first round, and on current polling to

151
00:09:08,640 --> 00:09:12,800
Speaker 1: be confirmed of course, don't believe the polls. She is

152
00:09:12,920 --> 00:09:15,360
Speaker 1: likely to make it to the second round and in

153
00:09:15,440 --> 00:09:19,120
Speaker 1: the second round to face off whoever comes first or

154
00:09:19,160 --> 00:09:23,120
Speaker 1: second in the second round. Uh so has the plurality

155
00:09:23,120 --> 00:09:26,120
Speaker 1: of votes apart from the votes she would get into

156
00:09:26,240 --> 00:09:29,400
Speaker 1: sound two. Jack Chirac, who was a sort of mainstream

157
00:09:29,480 --> 00:09:34,000
Speaker 1: central right incumbent, defeated her father by I think more

158
00:09:34,040 --> 00:09:37,640
Speaker 1: than eighty percent of the vote. Uh. This time, the

159
00:09:37,760 --> 00:09:41,920
Speaker 1: expectation is that she probably cannot make it to more

160
00:09:42,000 --> 00:09:45,199
Speaker 1: than fifty in the second round, but she might make

161
00:09:45,480 --> 00:09:49,280
Speaker 1: a very strong showing in that round of voting, and

162
00:09:49,400 --> 00:09:53,400
Speaker 1: therefore lots of uncertainty. It's going to be really interesting

163
00:09:53,480 --> 00:09:56,000
Speaker 1: to watch. We're going to take a break right now

164
00:09:56,280 --> 00:09:59,000
Speaker 1: for a word from our sponsor, and when we're back,

165
00:09:59,080 --> 00:10:01,839
Speaker 1: we're going to talk more about the impacts on the

166
00:10:01,920 --> 00:10:14,480
Speaker 1: economy and the Eurozone. Brought to you by Bank of

167
00:10:14,520 --> 00:10:18,000
Speaker 1: America Merrill Lynch. Seeing what others have seen, but uncovering

168
00:10:18,040 --> 00:10:20,840
Speaker 1: what others may not. Global research that helps you harness

169
00:10:20,920 --> 00:10:25,839
Speaker 1: disruption voted top global research from five years running. Merrill Lynch, Pierce,

170
00:10:25,920 --> 00:10:37,319
Speaker 1: Venner and Smith Incorporated. Welcome back, Nicholas. I want to

171
00:10:37,400 --> 00:10:41,360
Speaker 1: ask you now to talk about more of the economic issues. Uh.

172
00:10:41,559 --> 00:10:44,360
Speaker 1: You know, you had people of the UK voting to

173
00:10:44,520 --> 00:10:48,440
Speaker 1: leave the European Union. Uh. You know, you had Greece

174
00:10:48,720 --> 00:10:52,480
Speaker 1: hanging the balance with its fate in the Eurozone for

175
00:10:52,559 --> 00:10:56,040
Speaker 1: the last several years. What what would happen to the

176
00:10:56,160 --> 00:11:02,800
Speaker 1: euro and the European Union if mrs had won the election? Well, first,

177
00:11:03,400 --> 00:11:05,800
Speaker 1: even so six rounds of voting to get to the

178
00:11:06,120 --> 00:11:08,679
Speaker 1: knowing our president sounds like a lot. It's not the

179
00:11:08,840 --> 00:11:11,719
Speaker 1: end of the sequence because after the presidential election you

180
00:11:11,760 --> 00:11:14,960
Speaker 1: will have a parliamentary election and that will actually determine

181
00:11:15,520 --> 00:11:18,880
Speaker 1: the majority in parliament. And therefore the government, including the

182
00:11:18,960 --> 00:11:21,319
Speaker 1: Prime Minister, which is in the French system, is a

183
00:11:21,400 --> 00:11:26,320
Speaker 1: separate person from the president. So even if Mrs Lupin

184
00:11:26,920 --> 00:11:29,800
Speaker 1: wins as president, it's not to be taken for granted

185
00:11:29,920 --> 00:11:32,520
Speaker 1: that she will have a majority in parliament, so she'll

186
00:11:32,559 --> 00:11:34,800
Speaker 1: have major checks on her power. If if she were

187
00:11:34,880 --> 00:11:37,439
Speaker 1: to win this president well, if it depends on the

188
00:11:37,600 --> 00:11:40,480
Speaker 1: result of the parliamentary election. If she wins the presidency

189
00:11:40,600 --> 00:11:44,400
Speaker 1: and also gets a majority for her party in the parliament,

190
00:11:44,520 --> 00:11:47,200
Speaker 1: and she wouldn't have many checks. She would be very powerful.

191
00:11:47,360 --> 00:11:49,640
Speaker 1: But if she wins the presidency and doesn't win a

192
00:11:49,679 --> 00:11:52,360
Speaker 1: majority in Parliament, then it's not even clear that she

193
00:11:52,400 --> 00:11:54,679
Speaker 1: will have that much of an impact on policy. Well,

194
00:11:54,720 --> 00:11:57,360
Speaker 1: what's the greater chance right now winning the presidency or

195
00:11:57,600 --> 00:12:00,920
Speaker 1: National Front getting a majority in parliament. I think she

196
00:12:01,040 --> 00:12:03,959
Speaker 1: has a much greater chance of winning the presidencies and

197
00:12:04,440 --> 00:12:09,760
Speaker 1: of controlling parliament. But frankly, it's so unprecedented. The idea

198
00:12:09,800 --> 00:12:13,040
Speaker 1: of the National Front, a far right party, non mainstream,

199
00:12:13,480 --> 00:12:15,920
Speaker 1: winning the presidency is that we just don't know, and

200
00:12:16,040 --> 00:12:18,800
Speaker 1: there I'm not aware of any reliable pulling on the

201
00:12:18,880 --> 00:12:22,040
Speaker 1: parliamentary election at this point. They will probably come later

202
00:12:22,520 --> 00:12:26,720
Speaker 1: in the election cycle. But even assuming that she would,

203
00:12:27,320 --> 00:12:30,520
Speaker 1: which I think is not very likely but not impossible,

204
00:12:30,880 --> 00:12:33,559
Speaker 1: that she would control Parliament and therefore be able to

205
00:12:33,720 --> 00:12:37,319
Speaker 1: govern on her platform, it's not even clear in that

206
00:12:38,000 --> 00:12:41,120
Speaker 1: assumption that she would get Friends out of the Eurozone,

207
00:12:41,160 --> 00:12:44,160
Speaker 1: because what she's now saying is that she would seek

208
00:12:44,280 --> 00:12:48,520
Speaker 1: a concerted dismantling of the Eurozone, but by common agreement

209
00:12:48,760 --> 00:12:51,719
Speaker 1: of the different hero Zone countries. In other terms, she's

210
00:12:51,760 --> 00:12:55,800
Speaker 1: not advocating a unilateral withdrawal of Friends. Now, this is

211
00:12:55,920 --> 00:13:02,000
Speaker 1: very Frexit, well exactly basically a commonly agreed break up,

212
00:13:02,440 --> 00:13:06,319
Speaker 1: but not a withdrawal, just a France. So she basically

213
00:13:06,400 --> 00:13:10,640
Speaker 1: what she's saying is, my leadership will allow me to

214
00:13:10,960 --> 00:13:14,160
Speaker 1: convince all the other European member states, including Germanys, that

215
00:13:14,240 --> 00:13:17,200
Speaker 1: the euro is really a bad idea and should be ditched. Now,

216
00:13:17,320 --> 00:13:20,680
Speaker 1: the likelihood of this happening, obviously is very low because

217
00:13:20,800 --> 00:13:23,360
Speaker 1: in most euros own member states, there is a very

218
00:13:23,440 --> 00:13:26,640
Speaker 1: strong support for the Euro. I was yesterday in Portugal

219
00:13:27,080 --> 00:13:29,640
Speaker 1: in in Portugal, believe it or not, after a Troy

220
00:13:29,679 --> 00:13:32,599
Speaker 1: cap problem program and a lot of economic hardship in

221
00:13:32,640 --> 00:13:35,800
Speaker 1: the last few years, support for staying into your zones

222
00:13:36,040 --> 00:13:40,960
Speaker 1: more than nine. And that's not too unusual. In many

223
00:13:41,360 --> 00:13:45,520
Speaker 1: European member states, including Greece, you have very strong majorities

224
00:13:45,600 --> 00:13:47,800
Speaker 1: to keep the Euro. And that's the case in France

225
00:13:47,840 --> 00:13:51,959
Speaker 1: as well. So people like the PEN A number of

226
00:13:52,000 --> 00:13:55,120
Speaker 1: people like the Pan as an anti establishment figure, but

227
00:13:55,400 --> 00:13:59,480
Speaker 1: that doesn't necessarily mean that they take her anti euro

228
00:13:59,679 --> 00:14:03,960
Speaker 1: red week seriously, let alone literally. Well, let's let's take

229
00:14:04,000 --> 00:14:07,320
Speaker 1: another step back and talk about some of the challenges

230
00:14:07,440 --> 00:14:11,800
Speaker 1: that France's economy faces. What what kind of situation is

231
00:14:11,840 --> 00:14:13,920
Speaker 1: it in, you know, what what kind of challenges does

232
00:14:14,000 --> 00:14:17,160
Speaker 1: it have that are unique to the nation, and what

233
00:14:17,320 --> 00:14:21,200
Speaker 1: does France face that that has proved in common with

234
00:14:22,240 --> 00:14:24,880
Speaker 1: much of the rest of Europe. You know, France is

235
00:14:24,920 --> 00:14:26,920
Speaker 1: a bit of the middle of the world country into

236
00:14:27,040 --> 00:14:29,440
Speaker 1: your zoo, and it's not the worst performer, it's not

237
00:14:29,560 --> 00:14:33,880
Speaker 1: the best. It doesn't have problems that are unique, it

238
00:14:34,000 --> 00:14:36,040
Speaker 1: has problems that are shared by a number of other

239
00:14:36,160 --> 00:14:41,880
Speaker 1: member states UH law productivity grows, lots of frigidities into

240
00:14:41,880 --> 00:14:44,120
Speaker 1: the economy and at least the labor market, but also

241
00:14:44,280 --> 00:14:48,240
Speaker 1: the goods and services markets. Not enough competition, not enough

242
00:14:49,160 --> 00:14:53,920
Speaker 1: entry of fast growing firms into established markets UM and

243
00:14:54,360 --> 00:14:58,760
Speaker 1: UH and also rigidities in society, difficulty for people to

244
00:14:59,120 --> 00:15:01,880
Speaker 1: you know, a por social mobilities not what it should be.

245
00:15:01,960 --> 00:15:05,680
Speaker 1: Even so, actually income inequality is much lower than in

246
00:15:06,240 --> 00:15:08,880
Speaker 1: says the US or the UK, and hasn't been growing

247
00:15:09,560 --> 00:15:12,040
Speaker 1: UH and that makes Friends a bit of an outlier. Indeed,

248
00:15:12,120 --> 00:15:15,880
Speaker 1: including in the continental European context, hasn't been growing in

249
00:15:16,000 --> 00:15:21,200
Speaker 1: the last few years. So it needs reform, It needs

250
00:15:21,240 --> 00:15:25,400
Speaker 1: more growth, It needs uh an economic systems that is

251
00:15:25,480 --> 00:15:31,200
Speaker 1: more friendly to investment and corporate development and innovation. But

252
00:15:31,400 --> 00:15:34,600
Speaker 1: I would say none of these problems is extremely acute.

253
00:15:34,720 --> 00:15:38,160
Speaker 1: So it's more like a chronic condition, if you will,

254
00:15:38,280 --> 00:15:44,160
Speaker 1: of insufficient dynamism and insufficient economic vitality riders and specific

255
00:15:44,240 --> 00:15:49,320
Speaker 1: issues that is very, very prominent and specific to that country.

256
00:15:49,920 --> 00:15:53,480
Speaker 1: We're talking now about just over a year after the

257
00:15:54,240 --> 00:15:58,400
Speaker 1: terrible incident at the Battle Clan in Paris, and there

258
00:15:58,440 --> 00:16:01,800
Speaker 1: have been several there's like the one in Niece of

259
00:16:02,000 --> 00:16:06,200
Speaker 1: the past year. Has has that affected people's mindset? Uh,

260
00:16:06,600 --> 00:16:10,000
Speaker 1: you know, both from a political and economic standpoint. It

261
00:16:10,120 --> 00:16:14,720
Speaker 1: has affected the economy because it has affected tourism. Um.

262
00:16:15,120 --> 00:16:19,880
Speaker 1: External perceptions obviously matter in this area. Domestically, I think

263
00:16:19,960 --> 00:16:22,120
Speaker 1: it has added to a sense of gloom and it

264
00:16:22,280 --> 00:16:27,440
Speaker 1: has added to the unpopularity of the government because there

265
00:16:27,560 --> 00:16:30,440
Speaker 1: has been a feeling after several of these attacks, including

266
00:16:30,480 --> 00:16:33,760
Speaker 1: the one on July fourteens this year in this that

267
00:16:33,880 --> 00:16:37,760
Speaker 1: the government wasn't doing everything possible to protect the people

268
00:16:37,840 --> 00:16:42,760
Speaker 1: against this sort of assault. So so it has added

269
00:16:42,840 --> 00:16:47,400
Speaker 1: to the negattivity of public feeling in France. I wouldn't

270
00:16:47,960 --> 00:16:51,800
Speaker 1: necessarily say it has created a whole different political dynamic

271
00:16:51,920 --> 00:16:55,280
Speaker 1: of its own. In a way, it has only reinforced

272
00:16:55,880 --> 00:17:00,480
Speaker 1: skepticism that was already present in the population before this

273
00:17:00,640 --> 00:17:04,560
Speaker 1: wave of attacks started in January two sound fifteen. Now,

274
00:17:04,680 --> 00:17:09,200
Speaker 1: looking at the rest of Europe, or maybe just next

275
00:17:09,240 --> 00:17:14,480
Speaker 1: door at Germany, which is also moving to elections, Chancellor

276
00:17:14,560 --> 00:17:20,320
Speaker 1: Markel's reputation has taken something of a hit or popularity,

277
00:17:20,400 --> 00:17:24,760
Speaker 1: I guess because of the refugee situation. What's the state

278
00:17:24,800 --> 00:17:27,879
Speaker 1: of the movement towards populism and uh, you know, are

279
00:17:27,920 --> 00:17:31,440
Speaker 1: we going to have a similar conversation about Germany next year?

280
00:17:31,800 --> 00:17:34,800
Speaker 1: I don't think so, Frankly. I think the political equations

281
00:17:34,880 --> 00:17:37,280
Speaker 1: in Germany are very different from what they are in France.

282
00:17:37,359 --> 00:17:40,320
Speaker 1: And as I mentioned before, the National Front in France

283
00:17:40,440 --> 00:17:42,720
Speaker 1: is not a new phenomenon. It's been around for more

284
00:17:42,800 --> 00:17:48,560
Speaker 1: than a generation as a strong national protest party. There's

285
00:17:48,600 --> 00:17:51,399
Speaker 1: nothing comparable in Germany. There is a new party's alternative

286
00:17:51,440 --> 00:17:55,080
Speaker 1: for Germany's that is pulling about what the National Front

287
00:17:55,240 --> 00:17:58,560
Speaker 1: was making in France thirty years ago, but it's far

288
00:17:58,800 --> 00:18:03,720
Speaker 1: from being complating a position of national power. And therefore

289
00:18:04,080 --> 00:18:07,080
Speaker 1: I think there is a bit of an easy parallel

290
00:18:07,160 --> 00:18:11,160
Speaker 1: to make in terms of populism gaining everywhere. The reality

291
00:18:11,280 --> 00:18:14,720
Speaker 1: is that the political prospects are very different from one

292
00:18:14,760 --> 00:18:18,159
Speaker 1: European country to another, and there is nothing comparable to

293
00:18:18,359 --> 00:18:21,399
Speaker 1: the possibility of Martin Lepin being president in France. There

294
00:18:21,480 --> 00:18:24,000
Speaker 1: is nothing comparable to that in Germany. At this point,

295
00:18:24,840 --> 00:18:26,879
Speaker 1: Nicholas will have to leave it there. Thank you so

296
00:18:27,080 --> 00:18:29,440
Speaker 1: much for joining us. This has been a really interesting

297
00:18:29,520 --> 00:18:32,520
Speaker 1: and fascinating conversation, and thanks a lot for having me,

298
00:18:33,080 --> 00:18:36,360
Speaker 1: all right, Benchmark will be back next week, and until then,

299
00:18:36,440 --> 00:18:38,880
Speaker 1: you can find us on the Bloomberg Terminal and Bloomberg

300
00:18:38,960 --> 00:18:42,199
Speaker 1: dot com, as well as on iTunes, pocketcasts, and Stitcher.

301
00:18:42,560 --> 00:18:44,639
Speaker 1: While you're there, take a minute to rate and review

302
00:18:44,680 --> 00:18:47,040
Speaker 1: the show so more listeners can find us and let

303
00:18:47,160 --> 00:18:48,639
Speaker 1: us know what you thought of the show. You can

304
00:18:48,720 --> 00:18:51,200
Speaker 1: talk to us and follow us at Twitter. You find

305
00:18:51,240 --> 00:18:54,600
Speaker 1: Scott at Scott Landman. You can find me by Keith Smith.

306
00:18:55,080 --> 00:18:56,680
Speaker 1: And our guest Nicholas is on as well, and you

307
00:18:56,760 --> 00:19:00,200
Speaker 1: can find him at Nicolas Underscore or Not. And it's

308
00:19:00,320 --> 00:19:06,480
Speaker 1: v R O N better on exactly Everything's better in French.

309
00:19:07,080 --> 00:19:14,920
Speaker 1: Thanks for listening, See you next time. Brought to you

310
00:19:15,040 --> 00:19:18,240
Speaker 1: by Bank of America. Merrill Lynch. Seeing what others have seen,

311
00:19:18,359 --> 00:19:21,360
Speaker 1: but uncovering what others may not. Global Research that helps

312
00:19:21,400 --> 00:19:25,560
Speaker 1: You Harness disruption voted top global research from five years running.

313
00:19:25,920 --> 00:19:28,360
Speaker 1: Merrill Lynch, Pierce, Fenner and Smith Incorporated