Bloomberg Audio Studios, podcasts, radio news. President Macron, thank you for talking to Bloomberg. We're here at your annual Choose France conference for foreign investors.
And as long as.
I've known you, you have always wanted to prepare France to like business more, but also business to like France more. And you look and you see what is happening here. You have had many successes. You are about to trumpet fifteen billion euros of investment in France, but you also know France has problems. The economy is not growing that much. The economy since you came in has grown roughly half
as fast as America. You still have a state that takes up fifty seven percent of GDP, and you have all that red tape which your government says it wants to get rid of, that is around three percent of GDP. So how do you persuade people to choose France against that?
Thank you very much for being here in this vers castle and this is quite a good wrap up. It just made. We delivered a lot of reform since the very beginning twenty seventeen. Tax cuts, flat tax on capital gains, we decreased from thirty three point three to twenty five percents corporate taxes. We made a lot of reforms on labor law and after COVID. During this the past two years with inflation war in Ukraine, we passed reform and
on pension scheme and unemployment mechanisms. I don't see a lot of countries around us having done so.
So you don't just want to be compared to Europe to you.
No, no, no, My point is just to say we delivered, We do deliver, and we will deliver. And this is why we will launch this week a new bunch of reform on labor market. We will launch a new bunch of simplification and attractiveness package for finance, and we will prepare for we have already launched new simplification and we will prepare for September a new bunch of reform on labor markets. So it's a permanent work. But I see
where we come from and where we want to go. France, who was lagging behind clearly in Europe because of too much bureaucracy, a strong system, a lot of strength, but lack of competitiveness, I think we bridge I don't think I see that we clearly bridge the gap with the others and now we are runners in Europe. My concern is not just France, is Europe in comparison with US and China. And this is the point you mentioned during
the three past decades. If you take this three the last three decades, we created half of the value per capita created by the US. Why lack of innovation, lack
of investment. This is the main reason. This is why now my top priority is to have a European policy saying we have to be much more innovative, we have to create a much more efficient capital market, we have to invest much more from a common budget as Europeans and from the private sector, and we have to deliver in parallel our decabination because I do believe that climates, digital growsome job creation are the scripillars of what we have to deliver, and.
Those will go through all of those.
But just on that point about the European economy, you had a full scale attack on it at the Sorbonne where you said it is sclerotic, it is being left behind. Do you think that from the EU's point of view, that sclerotic economy is a bigger long term challenge and say, think this is one.
I think this is clearly linked to what's happening as well. But we have to completely reset our model. I think now France clearly is one of the leading economy. We are number one in attractiveness, we've been number one during the past five years, and if you take job creation growth, we are one or second in the Eurozone.
Do you think so.
We are here now when I take Europe and especially the EU as a whole, but it's as well for UK. We have this issue in terms of business model. Why because we had low cost energy thanks to Russia, production thanks to santral and Eastern European countries with quite low costs, a market for exports China, and a geopolitical umbrella US. These pillars are being completely revised totally, yes, and it's
no more valid. So we have to reinvent and how by creating much more value on our own by being much more innovative, by creating much more jobs and jobs with value, good jobs, I would say, on our continents. The key point is deliver much more innovation and productivity
policy public and privates. The second key reforms is to accelerate the cabination and especially our electricity policy because through renewables and nuclear energy, we can deliver low carbon, sovereign and low cost energy, which is much more than important
gas and fossil fuels. Third, we need much more investment based on common budget and my view, based on public reports and figures, we need one trially in more in terms of budget, in terms of spending, and in parallel, we have to make the Capitan Market Union a reality, which is can.
I come on to the Capital Market Union because you have here an example.
You have BNP.
Yeah, now probably Europe's and definitely the Eurozone's most successful bank, worth eighty billion dollars. But you know you are entertaining these people like JP Morgan and someone JP Morgan is worth five hundred and fifty billion. It's it's nine times this big Bank of America, four times as big. And the reason why is BMP Parrybar cannot expand throughout the
European Union and take over other banks. This is very cool, civil you would like to see BMP take over one of these, take over a German bank or an Italian one.
I want.
I mean, we do need a consolidation, but we do need as well an actual domestic market as Europeans which is not the case. We have to deal with twenty seven regulations. You know, in energy, finance and telco are the key sectors where single market doesn't exist. It was
a choice at the very beginning. I do agree that we have now to open this box and to deliver a single market approach with much more efficient So our view is that now we want to elaborate Froanco German consensus on capital marketingion to have a single system of resolution, a single supervision and a much more integrated capital marketingion.
Would you be happy with, say Spain Santandre coming and buying society general, I mean part of.
That, it's part of the market, but dealing as Europeans means that you need consolidation as Europeans you're not.
So it could be cross board emergers for directions.
But this one is for banking union, it's already on track. Now we have to do it for capital marketingion, which is broader and and even more difficult. But we started to do so at a political level during the last console, and I do believe that we can find Aco German agreement. But why I want you to just understand the challenge for us seventy five percent of our financing as Europeans go through banks and insurance, so we need much more consolidation.
But we need a clear circulation of the savings all around the place. This is the first objective, to be much more efficient and to be sure that our savings will be invested in the right sectors and the right geographies. Second, every year three hundred billion savings goes to finance the US economy because we are not attractive.
So on.
In parallel with this capital market union and the simplification having an equal single market, we clearly need the same level playing field as the US in terms of financing, which means when you take solvency in basil, as long as it's not implemented by the US competitors, it should not be implemented by the European competitors. Otherwise this is a killer for his taking because these regulations just prevent you, i mean, our banks from investing in equity, which is
exactly what we need. And if you take the key driver of this difference between the US and Europe, the key driver is the fact that the US economy innovated and invested much more iniquity and innovation than the European economy. I think we did much better during in POSTCOVIC than
what we did during the financial crisis. But now this is a totally new world and we do need this new business model for the Europeans, more innovation, more investment, single market and capital market onion and a relevant trade policy because I want to at this point known the US and now China are compliant with WTO Today we are the only one in the room to respect just the regulation of the beauty.
And we are to naive we are to open both of.
Them, their players and their economies. Can we have to do this thing?
Can we come back to the to the issue of China later? But just another French company, Total you mentioned energy.
Total's CEO has.
Talked about moving its primary listing away from France towards New York.
Would you be happy with that?
Not at all? Would and I would be very surprised. No, I wait for any confirmation. I understood it was remorse so.
But it's interesting that it's tied to the idea that he would face extra ESG measures here that he would not face in America.
So thinks that would affect his valuation.
Do you mean that we are more SERUS than the US in terms of green economy and transition.
Yes, but you also in your speech at the Sorbonne you said, as I paraphrase, you said you cannot let decarbonization and be enemies exactly.
And this is my point. But the point is just we have to be sure when we regulate, we should not overregulate. Yes, and I think now we have to deliver. We need in Europe much more investment. We have to cut that tabs have more flexibility. But in parallel everybody has to be serious. I saw a lot of funds, a lot of asset managers saying we are with you on climate change. Where is the beef? Are you sure you are sufficiently compliant? Are you sure you are clearly
addressing the same issues. This is my point, and this is why we need a resting chrognization between the US and Europe. The restrant cognization is number one. The US regulation in terms of crimachange as should be more serious and realigned on the European ones. Second, the Europeans have to invest much more and be more serious and realign themselves on the US.
To answer iven another French company, I asked you about total and bmp lvmh. I look, so nobody has done better under the Macron presidency than Banner or No. He's now his wealth has increased by one hundred and seventy billion euros and he is now the richest man in the world, probably the first Frenchman to have that honor since Napoleon. And I think we can both say brave to mister Io. He's done it in a more peaceful way.
But it's interesting you look at the people who've right at the very top of the wealthiest people in France, mostly either airs or in fashion or both, and I wonder whether that is the kind of France you talked about creating. You always talk about technology, but the people who've done really well are these old style businesses.
You're right, all of them. I don't think it's all style of business, but it's a business where we have competitive advantage luxury fashion and so because France is one of a great place and Bernadaud consolidated this market very early. He was one of the font in this industry, and I think it is very good and this is a chance for us because first we speak about a lot of jobs which are located in France because a lot of these jobs are impossible to be relocated elsewhere.
When you speak.
About alcohol, when you speak about cognac, maniac, champagne, fashion and making a lot of this stuff, it's added value. It's low qualified and very qualified jobs. And in tall it consolidated the market elsewhere. And thanks to the fact that is listed in France, we consolidate a lot of value and value creation as well. This is why thanks to total lvmh BNP and so on. But we are the second largest place of the world to list your company.
But there is a there's a tension, isn't it If I look at all those people, or certainly as VMH carrying all those ones. They have done spectacically well by exporting to places like China. They've done very well out of globalization and all the prescriptions you were just talking about in terms of Europe having higher top trade rules being tougher with China. You know what will happen in a couple of months time, the Europeans will say we want.
To put tariffs on electric vehicles.
And what will happen is mister g despite what he told the last year, he will come back and will he will put tariffs on Cognac and that will help those very successful French business people.
Look, I think this is exactly the mistake we made twenty years ago on the solar panels, and we killed them our industry. I'm very simple. I don't like your own blackmail anybody. I just look at a picture. When you have diaries of ten for your electric for Chinese electric vehicles entering into our market, and when you are taxed between fifteen and twenty four when you go to the Chinese market, you have an issue. And on all
the different sectors. What we want is just reciprocity. We want and in fact more and that margins then regarding the relation with China, level playing field. So what we ask for is exactly that we want to be sure that in terms.
Of tariffs, subsidies, rules of.
Production, we have a fair competition. And I mentioned it very openly to present see. So it is not a geopolitical agenda. We don't want to blackmail and push back some of the production. We want to be sure it is fair. It's fair to launch precisely inquiries and look in details of the situation and revise it. If we are weak, if we are threatened by the fact that you can have retortion measures, you just don't do what
you have to do. We had this discussion and this is why they decided not to implement the first measures on Cognac, but to withdraw the first one. So I think it's it's a normal approach. But look at the situation today. The European Union is the most open place of the world. But you cannot serve if at the same time you have subsidieson other capacities in China and protection in some part of the market, and inflation rediction acts and buy American acts in the US. It doesn't fly once again.
So Europe has got to get tougher now.
But this is a necessary not because we are protectionists, because we want to protect our.
German The Germans do not agree with you without life.
I think it depends whom in Germany and for which perspective. It's certainly true that some German companies, when they are incorporated in China, for instance, benefiting from subsiditions, not just German, European American. Their interest is probably to preserve that and to sell themselves are over capacities in China to the
rest of the world. And especially the European markets. But the German economies interest is totally aligne with the French economies interests meaning creating jobs, creating value, but just protecting your business and your people when they are attacked by unfir measures and it's it's normal, it's part of the business. So for me, it's just a no brainer.
It's a very interesting journey watching you make the French love business more and business love France more.
Thank you very much, no, thank you. Into Bloomberg. It's very important.
Thank you for being here. I hope you will have the importanity to discuss with a lot of CEOs and we will continue because business is in permanent evolution, given the fact that your politics.
Is start moving all the time.
Thank you, thank you.
Jemis