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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Emmanuel Macron promised revolution

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Speaker 1: when he was running to be France's president for the

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Speaker 1: first time in twenty seventeen. Revolution was also the title

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Speaker 1: of Macron's memoir, and in that book and on the

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Speaker 1: campaign trail, Macron made the case for big structural reforms

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Speaker 1: for France. Since then, he's cut red tape, trimmed taxes,

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Speaker 1: and made it easier for French companies to fire workers.

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Speaker 1: Last year, Macron successfully pushed through Parliament a controversial increase

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Speaker 1: to the retirement age in France from sixty two to

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Speaker 1: sixty four. While making changes like that has not been easy,

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Speaker 1: but despite domestic pushback, Macron has not stopped there. He's

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Speaker 1: now set his sites beyond France's borders. He's talking about

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Speaker 1: the need to reform Europe as a whole. Leonel Laurent

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Speaker 1: is a Paris based columnist for Bloomberg Opinion. He says,

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Speaker 1: as ever, the devil is in the details.

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Speaker 2: France has all of the assets, I would say, to

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Speaker 2: really shine in this new cheo political world as a

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Speaker 2: European leader. The problem is always just the actual reality,

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Speaker 2: the final step it takes to actually deliver.

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Speaker 1: One step Macro is taking is to encourage foreign investment

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Speaker 1: through an annual event he holds called Choose France.

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Speaker 2: So this has been going on since he really took

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Speaker 2: over as president, and his pitch has always been a

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Speaker 2: kind of investment bankers pitch. It's basically saying that France

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Speaker 2: is a country that's opened business and that's doing the

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Speaker 2: work of reforming.

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Speaker 1: Itself, and a lot of companies have been choosing France.

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Speaker 1: The country has become one of the top destinations for

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Speaker 1: foreign investment in Europe. On Monday, against the backdrop of Versailles,

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Speaker 1: Macro made his case to a group of executives and

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Speaker 1: to Bloomberg's editor in chief John Micklethwade that his plan

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Speaker 1: will make Europe into a financial powerhouse that could rival

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Speaker 1: China and the United States.

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Speaker 3: My point is just to say we delivered, we do deliver,

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Speaker 3: and we will deliver.

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Speaker 1: Today on the show, President Emmanuel Macron's revolution, his bold

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Speaker 1: vision to transform Europe's economy, and his urgent warning about

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Speaker 1: what could happen if world leaders don't heed his call.

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Speaker 1: I'm David Ura, and this is the big take from

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Speaker 1: Bloomberg News. Bloomberg's editor in chief John Micklethwaite first met

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Speaker 1: Emmanuel Macron years ago, long before he became France's youngest president.

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Speaker 4: I've known him for a long time, for about twenty years,

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Speaker 4: I think, and he has always been someone who has

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Speaker 4: wanted to change the way that global business community feels

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Speaker 4: about France, but also changed the way that France feels

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Speaker 4: about global business.

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Speaker 1: I caught up with John by phone right after his

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Speaker 1: interview with Macron on Monday, and he told me give

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Speaker 1: it their long history. He's fascinated by the evolution of

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Speaker 1: Macron's goals.

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Speaker 4: He feels as if his real mission now is to

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Speaker 4: try and change Europe as much as change France.

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Speaker 1: John sat down with Macron on the sidelines of that

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Speaker 1: summit with business leaders, and this year Macron announced pledges

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Speaker 1: of a record fifteen billion euros of new investment from

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Speaker 1: some heavy hitters, including Microsoft. John told me that setting

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Speaker 1: was designed to send a message.

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Speaker 4: I remember telling French friends that I was seeing at

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Speaker 4: versaill and they say, come on, really, The truth is,

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Speaker 4: Versai tends to be an image for other obvious reasons.

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Speaker 4: He doesn't broadcast at home very much, but Versai works

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Speaker 4: a treat when you're bringing in foreign Mancas and things

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Speaker 4: like that, so that tends to be the sort of

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Speaker 4: reason why it was there. Yes, he was standing in

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Speaker 4: the footsteps of Napoleon Bonaparte.

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Speaker 1: To some extent, but foreign investment in France was not

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Speaker 1: the only thing Mickael Thwaite asked Macron about. As you'll here,

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Speaker 1: they went much deeper, covering everything from the World's richest

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Speaker 1: man and it's not Elon Musk to the future of Europe.

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Speaker 5: President Macrol, thank you for talking to Bloomberg. We're here

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Speaker 5: at your annual Choose France conference for foreign investors. And

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Speaker 5: as long as I've known you, you have always wanted

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Speaker 5: to prepare France to like business more, but also business

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Speaker 5: to like France more. And you look and you see

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Speaker 5: what is happening here. You have had many successes. You

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Speaker 5: are about to trumpet fifteen billion euros of investment in France,

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Speaker 5: but you also know France has problems. The economy is

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Speaker 5: not growing that much. The economy since you came in

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Speaker 5: has grown roughly half as fast as America. You still

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Speaker 5: have a state that takes up fifty seven percent of GDP,

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Speaker 5: and you have all that red tape, which your government

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Speaker 5: says it wants to get rid of that is around

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Speaker 5: three percent of GDP. So how do you persuade people

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Speaker 5: to choose France against that?

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Speaker 3: We delivered a lot of reform since the very beginning

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Speaker 3: twenty seventeen. Tax cuts, flat tax on capital gains, we

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Speaker 3: decreased from thirty three points three to twenty five percent,

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Speaker 3: corporate taxes, We made a lot of reforms on label

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Speaker 3: law and after COVID. During this the past two years,

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Speaker 3: we delivered, We do deliver, and we will deliver. So

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Speaker 3: it's a permanent work. But I see where we come

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Speaker 3: from and where we want to go. France, who was

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Speaker 3: lagging behind clearly in Europe because of too much BUREAUCRACYE

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Speaker 3: a strong system, a lot of strengths, but lack of competitiveness.

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Speaker 3: I think we bridge I don't think. I see that

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Speaker 3: we clearly bridge the gap with the others and now

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Speaker 3: we are in Europe.

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Speaker 1: President Macron's planned reforms don't stop at the labor and taxes.

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Speaker 1: He also sees investments as key to supporting innovation and

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Speaker 1: business growth in France. That would likely involve banking reform,

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Speaker 1: But there too, Macro is facing a slew of regulations,

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Speaker 1: not just in his own country, but in the EU

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Speaker 1: as well, something he and John also discussed.

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Speaker 3: I mean, based on public reports and figures, we need

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Speaker 3: one trillion more in terms of budget, in terms of spending,

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Speaker 3: and in parallel, we have to make the Capitan market

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Speaker 3: union a reality, which can.

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Speaker 5: I come on to the cattle market union, because you

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Speaker 5: have here an example. You have BNP. Yeah, now probably

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Speaker 5: Europe's definitely the Eurozone's most successful bank, worth eighty billion dollars.

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Speaker 5: But you know you are entertaining these people like JP

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Speaker 5: Morgan and so on. JP Morgan is worth five hundred

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Speaker 5: and fifty billions. It's nine times this weak Bank of

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Speaker 5: America four times as weak. And the reason why is

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Speaker 5: BMP Parry Bar cannot expand through the European Union and

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Speaker 5: take over other banks.

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Speaker 3: This is very cool.

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Speaker 5: You would like to see BMP take over one of these,

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Speaker 5: take over German Bank or an Italian one.

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Speaker 2: I want.

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Speaker 3: I mean, we do need a consolidation, but we do

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Speaker 3: need as well an actual domestic market as Europeans, which

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Speaker 3: is not the case. We have to deal with twenty

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Speaker 3: seven regulations.

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Speaker 4: You know.

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Speaker 3: So our view is that now we want to have

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Speaker 3: a single system of resolution, a single supervision and a

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Speaker 3: much more integrated capital market union.

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Speaker 5: But would you be happy with say Spain, Santandre coming

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Speaker 5: and buying society general.

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Speaker 3: I mean part of that, it's part of the market.

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Speaker 3: But dealing as Europeans means that you need consolidation. As Europeans, you're.

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Speaker 5: Not, so it could be cross the border mergers for.

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Speaker 1: Directions, mergers in both directions. Unlike in the US, where

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Speaker 1: the banking industry has been steadily consolidating for years and

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Speaker 1: where banks are now some of the biggest companies in

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Speaker 1: the world, in Europe there are steep barriers that make

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Speaker 1: it difficult for banks from one country to acquire banks

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Speaker 1: from another. That's meant real limits on how much European

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Speaker 1: banks can grow. Macro has spoken out against this. Macron

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Speaker 1: told John bigger banks, a more efficient system of lending

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Speaker 1: and increased comfort around taking financial risks are key to

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Speaker 1: economic growth in France and in all of Europe if

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Speaker 1: they want to start competing with countries like the US

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Speaker 1: and China.

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Speaker 3: In Talel, with this capital market union and the simplification

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Speaker 3: having an equal single market, we clearly need the same

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Speaker 3: level being filled as the US. Otherwise this is a

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Speaker 3: killer for his taking because these regulations just to prevent you,

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Speaker 3: I mean, our banks from investing in equity, which is

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Speaker 3: exactly what we need. And if you take the key

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Speaker 3: driver of this difference between the US and Europe, the

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Speaker 3: key driver is the fact that the US economy innovated

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Speaker 3: and invested much more in niqu innovation than the European economy.

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Speaker 3: And we do need this new business model for the Europeans,

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Speaker 3: more innovation, more investment, single market and gep it than

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Speaker 3: market union.

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Speaker 1: But as much as Macron has pushed for reform and innovation,

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Speaker 1: it's the more traditional French companies that have thrived under

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Speaker 1: his presidency, which is something else John brought up with Macron.

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Speaker 5: I looked, and nobody has done better under the Macron

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Speaker 5: presidency than bana U. He's now his wealth has increased

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Speaker 5: by one hundred and seventy billion euros and he is

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Speaker 5: now the richest man in the world, probably the first

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Speaker 5: Frenchman to have that honor since Napoleon, and I think

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Speaker 5: we can both say brave to mister Arno. He's done

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Speaker 5: it in a more peaceful way. But it's interesting you

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Speaker 5: look at the people who've right at the very top

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Speaker 5: of the wealthiest people in France mostly either airs or

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Speaker 5: in fashion or both. And I wonder whether that is

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Speaker 5: the kind of France you talked about creating. You always

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Speaker 5: talk about technology, but the people who've done really well

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Speaker 5: are these old style businesses.

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Speaker 3: You're right, I don't see think it's all style of business,

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Speaker 3: but it's it's a business where we have competitive advantage

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Speaker 3: luxury fashion and so on, because France is one of

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Speaker 3: a great places, and Bernardault consolidated this market very early.

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Speaker 3: It was one of the front unders in this industry,

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Speaker 3: and I think it is very good and this is

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Speaker 3: a chance for us because first we speak about a

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Speaker 3: lot of jobs which are located in France, because a

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Speaker 3: lot of these jobs are impossible to be relocated elsewhere.

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Speaker 3: When you speak about alcohol, when you speak about cogniac, maniac, champagne,

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Speaker 3: fashion and making a lot of this stuff, it's added value.

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Speaker 3: It's low qualified and very qualified jobs. And thanks to

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Speaker 3: the fact that is listed in France, we consolidate a

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Speaker 3: lot of value and value creation as well. And this

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Speaker 3: is why thanks to total lvmh BNP and so on.

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Speaker 3: But we are he's the second largest place of the

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Speaker 3: world to least your company.

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Speaker 1: So that's President Macron's pitch to global businesses. After the break,

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Speaker 1: I asked John if that will be enough to convince

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Speaker 1: more foreign investors to pour their money into the country,

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Speaker 1: what that could mean for the future of Macron's presidency

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Speaker 1: and the future of Europe. We just turned Emmanuel Macron's

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Speaker 1: pitch to chief executives. Fewer regulations for businesses and for banks,

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Speaker 1: letting companies grow bigger, take more risks. I asked Bloomberg

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Speaker 1: Editor in chief John Micklethwaite to put it in a

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Speaker 1: broader context. As a candidate, John, he called for a revolution.

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Speaker 1: What was that revolution then and how much has it

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Speaker 1: evolved or changed to now? So you talk about the

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Speaker 1: vision that he has for Europe, how much is that

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Speaker 1: part and parcel of what he set out on the

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Speaker 1: campaign trail in twenty seventeen.

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Speaker 4: I think the vision when he first came in was

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Speaker 4: much more about France. It was about that he wanted

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Speaker 4: to invent a kind of new kind of France, one

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Speaker 4: which felt more comfortable with capitalism. He wanted to merge

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Speaker 4: that with social democracy in a way, a little bit

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Speaker 4: like Tony Blair. If you said Thatcher he would run

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Speaker 4: a mile. But there was a little bit of that

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Speaker 4: as well, And yeah, he will point in he reduced taxes,

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Speaker 4: he did all these things. He has made. You know,

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Speaker 4: we now have a French members the world's richest person

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Speaker 4: in Bamor. We have many other things of Paris doing

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Speaker 4: quite well. Paris is gained a bit against London, although

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Speaker 4: I think that's probably shouldn't exaggerate that too much. But

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Speaker 4: it's done pretty well. But increasingly I think Macron is

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Speaker 4: driven by a realization that not much is going to

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Speaker 4: happen in France without changing Europe as well.

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Speaker 1: That's on the economic playing field, but the sort of

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Speaker 1: geopolitical one as well, And we've certainly seen him talking

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Speaker 1: more about and playing the role of a diplomat in

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Speaker 1: the context of the Russia's invasion of Ukraine. How does

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Speaker 1: he see himself as both an economic and political statesman today?

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Speaker 4: He sees it very much as into twined. At one

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Speaker 4: time I asked him whether Europe's sclerotic economy was a

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Speaker 4: bigger danger and putin and he ducks that one. But

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Speaker 4: I think he does see it together. He thinks his

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Speaker 4: vision of Europe is a place that it has tried

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Speaker 4: to play by the rules and is now being left

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Speaker 4: behind by China and by America, neither of whom he

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Speaker 4: thinks played by the rules, and so Europe has to

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Speaker 4: kind of come together, and that means being much tougher

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Speaker 4: when it's doing kind of trading deals with both, especially China,

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Speaker 4: but also America. And the same token, it needs to

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Speaker 4: reform itself within the wall that he wants to create

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Speaker 4: around Europe, so he wants to see more competition. He

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Speaker 4: also wants to see kind of more champions cut emerging,

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Speaker 4: and the particular one we talked about here was banking,

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Speaker 4: although we also talked about energy and luxury goods as well.

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Speaker 1: As we mentioned one of the big headlines from John's

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Speaker 1: interview with maccrone was the President's willingness to entertain the

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Speaker 1: idea that a French bank in this instance Associutationeral, could

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Speaker 1: be taken over by a non French owner. The example

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Speaker 1: John used with the Spanish bank Santander. That will certainly

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Speaker 1: raise eyebrows, but it's emblematic of what Macrol sees as

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Speaker 1: necessary to reform Europe's whole economy. After the interview, I

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Speaker 1: asked John how he thought that was landing. Could you

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Speaker 1: get a sense of how resonant that message is with

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Speaker 1: the executives who he's brought to France for this conference.

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Speaker 4: I think it's I think it does resonate a little.

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Speaker 4: You know, some business people were like some part of it,

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Speaker 4: some people weren't like others. You next have all the allies. People,

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Speaker 4: especially in Germany would say, well, yeah, that's fairly typical

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Speaker 4: of Emanuel Macrol. He'll go make big speeches about the

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Speaker 4: need for competition in Europe and the need for national

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Speaker 4: champions but on the whole he wants to have French

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Speaker 4: ones rather than other ones when the practice. You know,

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Speaker 4: his government vetoed the merger of supermarkets on the grounds

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Speaker 4: of national security, so you know he's got a little

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Speaker 4: form in that. You know, on his side, you can

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Speaker 4: say that saying fine, somebody could take over sociaa general

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Speaker 4: is a sign that he's moved on on that.

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Speaker 1: But John told me that something raising alarm bells were

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Speaker 1: the president's proposals to put up more trade barriers in

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Speaker 1: order to combat what he sees as unfair practices implemented

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Speaker 1: by the US and China.

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Speaker 4: I mean, just to use the example of France's richest

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Speaker 4: man and the biggest company of France with LVMH. That

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Speaker 4: is just like Carrying, just like Loreal, just like all

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Speaker 4: these different hemes, all these other big French fashion and

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Speaker 4: luxury goods houses. You know, they do very well out

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Speaker 4: of globalization. And what I think they are worried about

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Speaker 4: is if Europe puts up a barrier saying we don't

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Speaker 4: want China's electric cars, or maybe China says, well, we

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Speaker 4: don't want your hamdbags or your cognac either, or at

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Speaker 4: least we want to apply tariffs to them. And so

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Speaker 4: there are some parts of the French economy, indeed the

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Speaker 4: European economy, who would feel sort of threatened by this,

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Speaker 4: I think.

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Speaker 1: But Macroll's revolutionary spirit has been met with frequent protests,

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Speaker 1: political reality and a deep slide in his approval ratings.

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Speaker 1: How is this message playing with French people? Beyond the

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Speaker 1: gates at at Versailles we see President Macron's poll ratings,

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Speaker 1: we see sort of the political terrain shifting in France.

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Speaker 1: How much is he banking on this potential success getting

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Speaker 1: more for an investment as boosting his party in his

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Speaker 1: political prospect.

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Speaker 4: That's a very good question, as you point out, is

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Speaker 4: the kind of French public at the moment. If we

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Speaker 4: believe the polls, the person most likely to follow Mackerel, well,

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Speaker 4: there will be others, no doubt, but you know, Marine

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Speaker 4: Lapen is sitting there at the moment is the most

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Speaker 4: likely or bit just by plurality, and the Pens have

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Speaker 4: always been beaten before in the last round. But I

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Speaker 4: think that shows a considerable amount of discontent in the

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Speaker 4: wider sort of French universe, and that poses I think

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Speaker 4: a couple of problems for Mackerel in terms of his legacy.

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Speaker 4: The first is what happens if he becomes more famous

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Speaker 4: for what he was in being elected and perhaps in

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Speaker 4: the same way Parack Obama and after him everything comes

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Speaker 4: to pieces because to some Parack Obama is followed by

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Speaker 4: Donald Trump, then he might be followed by Japan.

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Speaker 1: For more of our interview with Emmanuel Macromo, read The

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Speaker 1: Big Take on the Bloomberg Terminal and at Bloomberg dot Com. Now,

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Speaker 1: before we go, I have some exciting news. We at

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Speaker 1: The Big Take have a new show launching tomorrow, Big

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Speaker 1: Take Asia. My co host Sarah Holder is here with

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Speaker 1: me in the studio. Hey Sarah, Hey David.

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Speaker 6: This is a big moment for our whole team. One

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Speaker 6: of my favorite things about working at Bloomberg is that

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Speaker 6: we have journalists all around the world in.

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Speaker 1: I think more than one hundred bureaus last time I.

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Speaker 6: Checked, and they're all working to bring you coverage with

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Speaker 6: a truly global perspective. We've heard illuminating episodes from countries

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Speaker 6: across Asia here on The Big Take in the past

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Speaker 6: few months.

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Speaker 1: And now we're going to have them every week. Janha

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Speaker 1: will join us as hosts. She's based in Hong Kong

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Speaker 1: and has been covering the region for nearly fifteen years.

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Speaker 1: Every Tuesday, she's going to take listers on a deep

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Speaker 1: dive into some of the world's most dynamic economies.

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Speaker 6: And the markets, tycoons, and businesses that drive the ever

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Speaker 6: shifting region.

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Speaker 1: The first episode is out tomorrow. You can find Big

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Speaker 1: Take Asia wherever you listen to podcasts. This is The

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Speaker 1: Big Take from Bloomberg News. I'm David Gura. This episode

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Speaker 1: was produced and mixed by Alex Segura. It was edited

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Speaker 1: by Stacy Vannox Smith and Ben Sills. It was fact

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Speaker 1: checked by Adriana Tapia. Our senior producers are Naomi Shaven

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Speaker 1: and Kim Gittelson. Our senior editor is Elizabeth Ponso. Nicole

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Speaker 1: Head of podcasts. Thanks for listening. Please follow and review

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