French finance minister urges investment-led growth in Europe
From the Rencontres Economiques gathering in Aix-en-Provence, France's finance minister Bruno Le Maire talks to the FT's Harriet Agnew about eurozone growth, EU top jobs and the IMF succession, and why France is standing firm on Brexit negotiations.
Filmed and Produced by Petros Gioumpasis
You can enable subtitles (captions) in the video player
I'm here at the Rencontres Économiques in Aix-en-Provence, a global gathering of economists, politicians, and business leaders. We're delighted to have Bruno Le Maire, France's finance minister, with us here today. So looking at the French economy to start with, how resilient is the French economy, do you think, given the global slowdown?
I think that the French economy is a resilient. We have a global slowdown in the growth at the world level. But when you are looking at the results of the French economy, we have a growth of around 1.4 per cent. That's the forecast for 2019 - above the average level of growth within the eurozone - which means that we are on the right direction and that the decisions that have been taken by Emmanuel Macron and the government prove to be efficient. We have more growth, more competitiveness, and we are reducing the level of unemployment in France. We have a level of unemployment that has never been so down since 2009.
And - now, we've seen a big spending package in order to curb the gilets jaunes but without a corresponding decrease in public spending to finance it. So-- should big business be worried that they're going to have to foot the bill or would you let the deficit increase and breach the European fiscal requirements?
I think that business should, first of all, look at the structural reform that we are introducing. We have already decided very strong reforms on taxation, very strong reforms on the job market - on the labour market - and we are doing exactly the same on the unemployment system. And we will also introduce a systematical reform on the pension scheme, which means that we are fully determined to remain on the path of reforms. But, of course, we will stick to our European commitments. And we are making sure that all our resources will fit with the European requirements.
Looking at Europe, we've seen all change in the top EU jobs in the past few days. So if Ursula von der Leyen is not backed by the European Parliament, who will be France's plan B.
We don't have a plan B. Our plan is to have Ursula von der Leyen being appointed. I think that the choices that have been made with Ursula von der Leyen as the president of the commission and Christine Lagarde as the next president of the ECB are excellent choices. Because they are two women of great experience, either at the international or the national level, and I'm sure that at the head of the commission and at the head of the ECB there will be really great leaders. I really hope that Ursula von der Leyen will have the backing from the European Parliament and the support of the European Parliament.
What's the biggest challenge do you think for Christine Lagarde? I mean, clearly following in Mario Draghi's footsteps is a huge challenge, but other than that what are the risks and challenges for someone who's not an economist, who's been appointed...
I confirm that. This is a huge challenge to succeed Mario Draghi because Mario Draghi is really a great guy and he has been really a great president of the ECB with a lot of skills, a lot of feeling of what might be needed by the markets and by the European economy. But I am also deeply convinced that when you are looking at what Christine Lagarde has done at the head of the IMF, she has been really successful.
She has been great and it will be the same for the ECB. The monetary policy is decided on a totally independent way by the ECB. So I don't have any advice to give to Christine Lagarde, but maybe one: to stay as she is, I mean, a great leader.
But is that a risk for the eurozone given that it's not an economist in this very important role?
The ECB must remain independent, but, on the other hand, I think that we should be concerned about the lack of growth within the eurozone. And I proposed a few weeks ago to have a growth compact with four pillars. The first one is introducing new reforms, economic reforms within the eurozone, to improve the competitiveness of the economies of the eurozone.
The second one is to rely on this monetary policy that is currently headed by the ECB. The third pillar is to stick to our European commitments as far as public expenses are concerned. And the fourth one, which is very important, is to invest more in innovation, in research, in infrastructure.
And should the next EU commission president stand up to Donald Trump?
The United States are a very close ally to the EU. And I think that it is in our common interest to pave the way for settlement on many issue. For instance, we have the question of the relationship Boeing - between Boeing and Airbus. We should try to find a settlement between the US and the EU. We should avoid to enter into any kind of trade war. Because when you are looking at the current situation, the slowdown is explained, first of all, by the risk of having a trade war and by the tariffs that have been imposed on China and on European countries. So let's avoid to have a trade war because the impact on the level of growth, at the world stage, will be very negative.
Moving on to the new vacancy at the top of the IMF, would it be possible to appoint a non-European to this role?
First of all, we need to have a European candidate and we will enter into discussions next week during the Ecofin on the European candidate. I hope that we will be able to find a compromise as soon as possible on the European candidate. And I hope that this European candidate will be a very good one, so that we would keep our chance to have the next general director of the IMF being a European one.
So would it be possible to have a non-European or you think no?
You know, I am a European, so I think that it is in the interest of Europe to keep the leadership at the IMF.
And will you be putting yourself forward as A candidate?
I won't to be a candidate for the IMF, I made that very clear. I won't be candidate for any post within the Commission because I want to stand as the minister of economy and finance of France, because I think that there is a need for stability. And if you want to be successful, if I want my country to be successful from both a financial and economic point of view you need stability and you need to keep the same people at the key post.
Now moving on to the UK. If Boris Johnson becomes prime minister, he said he'd like to renegotiate the withdrawal agreement. Is this possible from a European side?
We made very clear that there won't be any new negotiation. I think that we spent a lot of time negotiating a fair agreement. We are not willing to reopen that agreement and reopen the negotiation. You know, we are at a time where we need to move on. We need the EU to take very strong decisions on the industrial policy, on the competition policy, on the industrial champions. So we need to move on. And I think that it would be a waste of time to reopen the agreement and re-enter into negotiations with the UK.
But would you back an extension of the talks on the October 31 deadline in order to avoid a no deal?
It would be up to the head of states and to Emmanuel Macron to decide on that. But, once again, our priority is to reinforce the EU and to take decisions, to have more growth, more jobs, more innovation - being able to face the competition with both the US and China.