“We have entered a sustainable inflation economy”

29:16 on April 29, 2022

What lessons can you draw from the results of the presidential election?
One result seems symbolic to me: the re-elected president got 85% of the vote in Paris, while Marine Le Pen’s score reached 56.73% of the vote in Colombey-les-Deux-Eglises, the town of General de Pen Gaulle, located right in the middle of what is called the “vacuum diagonal.” The metropolitanization of the economy and jobs has not been reduced in five years. There are always two oppositions: the one where the adaptation to a globalized economy has been done without damage and the one that, on the contrary, suffers, causing a feeling of reduction. The underlying reason for the populist vote is at least as economic as identity. This should also appeal to business leaders.

How can they react?
We need to give opportunities to those who feel like losers in the system. The image of companies, which has been very positive for several years, has improved even more since the health crisis. In return, the French expect a lot from them. It forces us. During the pandemic, the entire corporate body of the company – employees, social partners, managers … – rolled up to save the work tool and then left. Since then, wage negotiations, heralded as difficult, have gone quite well. We have also signed five major agreements between social partners at the national level in less than two years, including those on teleworking, training and joint action. This positive climate is an opportunity to participate in the great project to combat climate change, in particular through social dialogue.

“Green” technologies, in cement or steel, among others, are more expensive in investment and production

The President of the Republic has spoken out in favor of ecological planning. What do you think?
The term does not scare me. The state is in its role. These investments can only be conceived in the long run, without being able to produce a quick return. Therefore, the need to plan is justified, as long as the sectors are actors, in particular the first stakeholders such as industry, transport, energy or housing. The European Union has begun this process, France must continue.

Will green planning lead to degrowth?
No. The reduction is not acceptable to most of our fellow citizens. Not for the rest of the planet. We must invent decarbonized capitalism, through more limited growth. Solutions exist. Others will be found through scientific innovations. “Green” technologies, in cement or steel, among others, cost more in investment and production. They guarantee a form of sobriety, but will lead to a rise in the prices of industrial goods that will affect many sectors, including housing. We cannot tell the French that the ecological transition will be painless or without effects on their purchasing power, especially when we know that 80% of employees take the car to go to work.

Will it be painless for work?
Not anymore. We can already see this in car manufacturing. Jobs will be created, but not in the same sectors as today.

What will be the consequences of the war in Ukraine?
I went there in July 2021, with a delegation of business leaders. We had met President Zelensky, who had already told us about his desire to join the European Union. The war in Russia will have important consequences for our economy. It serves as an indicator of energy dependence: all those who still doubted the need for a strong nuclear sector are now, I hope in any case, convinced. This carbon-neutral, independent energy source is a major asset, while France has been divesting for ten years. There is an urgent need to reinvest in industry resources and skills.

We don’t have to go into a permanent “whatever the cost”

Will inflation last?
I am scared. Part of this is the result of the health crisis and the war in Ukraine, due to bottlenecks in production chains. But we have entered an economy of lasting inflation, with higher energy prices and a shortage of certain raw materials, such as metals. It’s an environment that most business leaders have never experienced. Neither will the population as a whole, which will face – through the inevitable rise in interest rates – rising prices in the crucial housing sector. Hence the need to plan. And to inaugurate a new method of government, bringing together the agents, by sectors, to obtain operational results, rather than through the “high masses” of the past, from which nothing concrete can emerge. The territorial dimension is essential and must be taken into account in all areas, including taxation.

What measures do you expect?
We want to be able to compete on an equal footing with our European competitors. Corporate tax has fallen below the end of the term, but production taxes are still 35 billion euros higher than the European average. This must be the priority of the new government.

Are you concerned about the state of public finances?
The decisions taken during the health crisis were justified by the scale of the crisis. But we don’t have to get into a permanent “whatever the cost”. The key issue is the effectiveness of public spending, as evidenced by the incredible fiasco of issuing passports. We see a huge skills gap in companies, despite the success of learning reform. The results of national education have been declining for thirty years, according to all the rankings. The difficulties of the public hospital are undeniable. While in these two areas France spends more than its neighbors. The improvement in public finances also depends on the improvement in the employment rate, which remains 10 points below that of Germany. It is this criterion that will allow the increase of the income and the reduction of the expense. Increasing it by 5 points could be one of the goals of the opening mandate. The key is skills. And so in training.

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