Bruno le Maire, Emmanuel Macron’s economy minister, has successfully adopted his president’s philosophy of en même temps, which literally means “at the same time” and in practice means switching from conciliatory to oppositional in extremely short order. The approach was very clearly on show at Chatham House this week: first he went from assuring the audience of his love for the “British” [English] to making it crystal clear that financial services will not be part of a free-trade agreement after Brexit; then he jokingly quoted Churchill before announcing firmly that “leaving the EU has consequences”.
Le Maire, who was Nicolas Sarkozy’s secretary of state for European affairs before he left the right-wing party Les Républicains for Macron’s En Marche! last year, had already set the tone with his opening dismissal: “In Paris, no one talks about Brexit… life goes on”.
Acknowledging that the UK is leaving “both the single market and the customs union”, he promised that the EU would negotiate an “ambitious” free trade agreement, but would not enable full access to the single market. And he left no doubt: there will be no financial passport for the City’s banks.
“The rules will change”, he said. “We don’t believe that financial services can be part of an FTA, because financial services are not goods.” He had earlier told the BBC: “Financial services cannot be in a free-trade agreement for reasons of stability, for the sake of supervision.”
Instead, he offered the EU regime of equivalence, the kind of deal already on offer to those outside the EU, including the US and Japan. “It is in our mutual interests to ensure the best possible arrangements with no-tariffs or the lowest possible tariffs”, he said.
He has also been open about the advantageous flipside of this new reality, the possibilities Brexit offers the French market. He told French media that “thousands, and not hundreds” of jobs would move to London from Paris after Brexit, a move Macron’s pro-business government would welcome warmly.
“The time when France said that finance when the enemy is over”, Le Maire added. “It is our responsibility to make France more attractive so that more jobs are created for the French people.” He admitted this would not happen overnight but “on the long term”: “It will be the banks’ choice”. Unfortunately for him, Goldman Sachs has indeed put its staff on notice for a move by June of this year, but it is to Frankfurt, in Germany.
Le Maire also used his speech at Chatham House to push for Eurozone reforms and greater integration within the EU, with the creation of a banking union and the ability to achieve fair taxation of internet giants. It was Emmanuel Macron speaking in all but name: “France is changing”, he said, “and Europe is back.”
He also drew a parallel between Britain’s EU referendum and the French election last year – both elections were about “determining the long-term future of our countries”, although France, he said, chose to “try something new”.
“The solutions [to the problems raised by Brexit and France’s far right] will come from closing our borders and having debates about our identity”, he said. “We see in our own countries how globalisation is called into question. If we want globalisation to be a success, if we don’t want populism to rise, we need to act together.”
For Britain, of course, much of what Macron and Le Maire are proposing will not look especially new. The government has started this economic “transformation” by liberalising the French labour laws and tax system, as well as privatizing public services, starting this month with the public rail, SNCF. It has also promised “a €10 billion fund for disruptive innovation”, which Le Maire said would be financed by the privatization of public services. “We do not have another choice but to reduce the level of public spending, of taxes and public debt,” he said. “We have the highest amount of public expenses among western countries, and the reason is unemployment.”
He can point to signs of progress – France’s growth rate reached 2 per cent in 2017 and its unemployment rate is falling – but the economy’s strength is largely attributed to François Hollande’s slow-burning policies, which, incidentally, helped make him one of the country’s least popular leaders of all time by the end of his mandate.
One problem for any attempt to use economic liberalisation to fend off populsim in France is the fact that many French people who voted for Marine Le Pen’s National Front at the last election live in rural, sometimes remote areas that are unlikely to benefit from an innovation fund. They are, however, already seeing the layoffs allowed by more liberal labour laws, and the cuts to public services.
“I’m just trying to offer jobs to French people”, Le Maire said. “The political purpose is not the reduction of public expenses, it is the reduction of the unemployment rate in France.”
There may be only so long Le Maire can keep having it both ways at the same time.
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