WEBVTT - Medef's Fabrice Le Saché Talks French Political Turmoil

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<v Speaker 1>Bloomberg Audio Studios, Podcasts, radio news. Emmanuel Macron's gift to

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<v Speaker 1>choose who he wants to lead his next government, and

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<v Speaker 1>the question is what will that mean for the country's

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<v Speaker 1>economy and for the prospects of passing a budget. Let's

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<v Speaker 1>discuss now with Fabrius Lesachet, who's the vice president of

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<v Speaker 1>France's biggest business lobby, MEDEF. Fabri's good to talk to

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<v Speaker 1>you again on Bloomberg Radio. Thanks for joining us this morning.

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<v Speaker 1>I mean, how passive, mister, are you about the future now?

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<v Speaker 1>Given that we've gone through another prime minister. We're heading

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<v Speaker 1>for number seven under Emmanuel Macron. Do you think that

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<v Speaker 1>he can find anyone who can do better?

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<v Speaker 2>I don't know about this. You know, for us, the

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<v Speaker 2>identity of the prime minister is not the main The

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<v Speaker 2>important part is are we able to find compromise, political

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<v Speaker 2>compromise to support for business policy and to carry on

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<v Speaker 2>the reforms that are much needed and change the cure

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<v Speaker 2>of the debt which is now skyrocketing, putting in danger

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<v Speaker 2>the country because the interest rate go up and also

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<v Speaker 2>the cost of paying all these refinancing. All this and

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<v Speaker 2>at some point we will pay one hundred billion in

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<v Speaker 2>one or two years. The forecast that wonticipit is that

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<v Speaker 2>will pay one hundred billion euro year or just for

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<v Speaker 2>the debt interest. This is not lasting, this is not sustainable.

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<v Speaker 2>We need money for something else, for investments. We need

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<v Speaker 2>also to drop down the tax. We need to revise

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<v Speaker 2>very seriously the social spending. We know that two thirds

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<v Speaker 2>of the debt comes from pension and comes from social spending,

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<v Speaker 2>and we know what we need to do. So that's

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<v Speaker 2>the main point.

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<v Speaker 1>For preseos with the masters. Of course that we heard

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<v Speaker 1>loud and clear from the last two prime ministers. They

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<v Speaker 1>didn't have any success in addressing any of those issues.

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<v Speaker 1>Do you think that the socialist prime minister could make

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<v Speaker 1>things better or worse for business?

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<v Speaker 2>Not at all when you read if it's based on

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<v Speaker 2>the socialist program, it will be a catastrophe because they

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<v Speaker 2>want to do like in the UK and even worse

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<v Speaker 2>tax on capital game, which will be an open door

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<v Speaker 2>to escape the countries for pats of wealth, for hoppreneurs,

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<v Speaker 2>for business people, and this is not what we want.

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<v Speaker 2>We want to welcome entrepreneurs in this country because if

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<v Speaker 2>we need to repay the debt, we can only do

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<v Speaker 2>it with growth, with added value with revenues, with profits,

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<v Speaker 2>and not by getting the countries more poor. So no,

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<v Speaker 2>it will be a catastrophe. But the Socialist cannot rule

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<v Speaker 2>the country without a compromise with the other political parties,

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<v Speaker 2>so we will need to see. But of course it

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<v Speaker 2>will be a bad signal, that's for sure.

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<v Speaker 1>Fabrius, what's the danger in the interim period when we're

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<v Speaker 1>in another uncertain period for French pol Arguably nothing's really

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<v Speaker 1>been achieved in the past two years. What does that

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<v Speaker 1>mean for your members? What does that mean for business

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<v Speaker 1>in France? Now?

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<v Speaker 2>In fact they have achieved. One thing is unstability, which

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<v Speaker 2>is not good for business because when you cannot obviously

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<v Speaker 2>plan and expect something a bit stable, you don't invest.

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<v Speaker 2>And when you see the growth in France which was

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<v Speaker 2>zero point three percent in the second quarter, a bit

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<v Speaker 2>more than the expectation, but still low, it does not

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<v Speaker 2>rely at all on private investment or consumption. The savings

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<v Speaker 2>are skyrocketing, the investment is very low. That showed no

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<v Speaker 2>confidence from consumers and corporations, and the growth is only

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<v Speaker 2>based on a technical storage stock. So this is not

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<v Speaker 2>a good sign and the outlook is not very positive.

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<v Speaker 2>If you add on that the tariffs from the US

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<v Speaker 2>and the work capacity from China, the stakes are very high.

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<v Speaker 1>Okay, fabrus asashe vice president of French business OP Group,

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<v Speaker 1>madef thank you very much for joining us.