“The recovery will be long, difficult and costly”

The French Minister of the Economy, Bruno Le Maire, was the guest of RFI and France 24 this Friday April 3 at 8:30 am (Paris time). He was interviewed live by Christophe Boisbouvier and Roselyne Febvre.

Roselyne Febvre (France 24) : Since the beginning of the crisis, you have had a Churchillian discourse. You say that “ The turnaround will be long, difficult and costly and there will only be efforts to be made ” You made your own the doctrine of Emmanuel Macron : “ Save the economy no matter what ” What must be remembered for France is notably 300 billion loans guaranteed by the Etat. It’s a lot, it’s massive. But is that enough?

Bruno Le Maire : It’s a first step anyway. But I confirm to you that we decided with the President of the Republic and the Prime Minister to do everything to save our economy and to avoid that there are bankruptcies in cascade, millions of unemployed people who register with Pôle Emploi, as is currently the case in the united states, more than 10 million people who registered unemployed in 15 days. We have avoided this economic and social breakage. We have put a lot of public money: 45 billion euros in public aid on an economic emergency plan, 300 billion euros in loans guaranteed by the state to precisely avoid this economic and social breakdown. Because we have taken stock of this crisis from day one. I made a comparison with the great recession of 1929 because I believe it is the same magnitude: all countries are affected, all continents are affected. It is extraordinarily brutal for millions of entrepreneurs in our country. And I repeat, the recovery will be long, difficult and costly. And so, it is better to avoid social and economic breakage, support employees, pay short-time working, support businesses, in particular by postponing social charges and deferring tax charges rather than having to rebuild everything tomorrow. I think this is the most responsible and wisest policy.

Christophe Boisbouvier (RFI) : France is in dire need of tests, of masks too. And these masks, she expects a billion from China, but currently the Americans are diverting them by bidding. Should France give up Chinese masks ? France is condemned to the shortage of masks ?

Bruno Le Maire: Today, the main thing, the Prime Minister has made it clear, is to put as many people as possible on masks. And in absolute priority, absolute, the nursing staff, those who are in daily contact with the virus and who protect us, who care for us, who accompany the sick. It is to them that we must provide masks. So we find them in China. We also greatly accelerated national production, French production. I want to salute all the manufacturers who have converted their production line to produce masks. I think it’s a good move, it’s a responsible move, a patriotic one I would say. And we must in the weeks and days that come to produce as many masks as possible on the national territory. Then we must draw a long-term consequence, it is the absolute need to reconstruct certain value chains in France whether it is on the active principles of certain drugs which today are produced in China, on masks, on respirators. We have to be independent. This is a lesson we have learned from this social crisis and this health crisis. We must strengthen the economic independence of our country.

RF: A reflection that has already been going on for a little while on your part as well. So the lack of solidarity …

BLM: I have been defending this idea of ​​economic sovereignty for several months. And I can tell you that I feel reinforced in my convictions, in my positions. We must strengthen our national economic sovereignty and our European economic sovereignty. What we did for electric batteries almost two years ago now with my German counterpart Peter Altmaier, it will have to be done for many other production chains, especially in the medical field.

RF : “ Lack of solidarity poses deadly danger to the European Union “, This declaration is signed Jacques Delors, former President of the European Commission from 1985 to 1995. First, do you share this fear and do you hope that the European Stability Mechanism, which was created after the financial crisis of Greece to help the states in financial crisis, will be activated because in the bottom, it is its reason for being?

BLM: I share 100% of Jacques Delors’ analysis. If Europe is not faithful to its historical roots, that is to say if it does not show human solidarity, and if it does not put this human solidarity before any economic or financial consideration, it does not will not recover from it, quite simply because the European political project will lose its meaning. Millions of European citizens, especially in Italy and Spain, will say: what is the point of continuing a political construction which is not even capable of having a minimum of empathy and solidarity with regard to peoples who suffer . So, I share this analysis of Jacques Delors 100% and that is why I fight every day, with the President of the Republic, so that this solidarity takes a very concrete form. There are good decisions that have started to be made. They were taken late, but they were taken by Europe to support our economy. Now, we are at a crossroads: either we continue and we show our solidarity in a very concrete way vis-à-vis all the countries which are affected by the virus; either we return to our national selfishness and Europe will not recover from it, Europe will die and the euro zone will disappear. This is why next Tuesday we have a very important meeting, the meeting of the finance ministers of the euro zone. There must be decisions next Tuesday, not palaver, decisions to support the economies of the euro area. Decision to activate the European Stability Mechanism, we created this mechanism to deal with the crisis and there is a major crisis like we have not known since 2008, so we must use this European Stability Mechanism, otherwise what’s the point of having created this mechanism. Secondly, using the European Investment Bank: it has credits, it has money, it’s time to use it to help countries that need to invest in their hospitals, in their medical equipment, in responding to the crisis. Third, the partial unemployment support mechanism: we all spent a lot of money on partial unemployment. The President of the European Commission has just proposed to finance these partial unemployment mechanisms, I think that is a great idea. Then there is a fourth proposal, the one that is the most debated today, is to create, as we proposed yesterday, a fund that is a response fund to the consequences of the economic crisis, which could be financed either by endowments from countries, or by a specific solidarity tax, which would allow us in the long term to have the money available to rebuild our economy and revive the European economy. And I hope that this solidarity between the member states of the European Union, through this response fund to the economic crisis, will find an echo as early as next Tuesday.

RF : So, if everything is over, and if everything is activated as you have just said, we know that even with the European Stability Mechanism (MES), it may not be enough? Or the idea of ​​issuing coronabonds, that is to say to borrow in the form of bonds …

BLM: You are quite right. The European Stability Mechanism, to give orders of magnitude: if we develop it to the extent that we have proposed, it is 240 billion euros …

RF : So half …

BLM: … Which are made available to the 19 member states of the euro area.

RF : Because it’s 410 billion normally?

BLM: It’s already an important amount.

RF : So you would take half since …

BLM : We can unlock 240 billion. This 240 billion is already a very large sum. And after each state would have the right to shoot according to its needs. But this will not be enough in the long term. We need more and from this point of view, we must effectively pool debt between the member states of the euro zone, this is what we are proposing through this fund. It’s better to get into debt today with low interest rates and have the financial means at hand than to let our economy collapse. This is what we are proposing with this response fund to the coronavirus crisis which would be financed by debt, reimbursed as I said either by a solidarity tax or by national contributions, and which, I do not not want to give amounts on this fund, it is still too early to say, but that would allow us to have over several years, we proposed that it be a fund of 5 to 10 years over several years, all the states of the European Union would have the means necessary to revive their economy, because believe me, reviving the economy, in France as in Europe, will be costly and difficult.

RF: If the Germans make this recovery, by the way.

CB: There are very few countries in the South endowed with medical means to cope with this terrible coronavirus, in particular respirators, resuscitation stations. To help these countries of the South, it was on RFI and France 24 a week ago, Antonio Guterres, the secretary general of the UN, proposed an emergency plan of three trillion dollars. You yourself speak of these national “egoisms”. Everyone sees noon at his door. You can see it well with the masks, with the battle between Chinese, Americans and French. Frankly today, do you see the countries of the North agreeing to pay this immense sum of 3 Trillion dollars and how?

BLM: I do not know if it will be $ 3,000 billion. What I know and what I am convinced is that there is only one European Union. There are no countries of the North and countries of the South, countries of the East and countries of the West. Each has its geography, each with its historical memory, but there is only one political construction. And in times of crisis, we have to come together, be able to show solidarity, effectively pool part of our debt, specifically to finance the response to the crisis and finance the health resources you mentioned, otherwise it is not worth building Europe. It’s no use. Otherwise some of the French and the Spanish will tell us, it is useless…

CB: We misunderstood each other. The question related to the countries of the South, in particular on the African countries and on Guterres’ proposal to spend 3,000 billion dollars for the countries of the South, an emergency plan …

BLM: On African countries, you see that it is also the same logic. I am very worried, I said it two days ago, about the violence which this crisis will hit the least developed countries, and in particular the African countries. And as part of the G20, I called for total solidarity. I asked, as the President of the Republic wished, that we already use the resources of the International Monetary Fund by issuing special drawing rights amounting to $ 500 billion. I asked that there be a moratorium on the debt of these countries. We are ready in France to pilot this issue of the debt moratorium for developing countries. All African countries today must be able to benefit, when they are in a difficult situation, from this moratorium which could be decided within the framework of the Paris Club, under the impetus of France. This is a very concrete proposal that we are making to help these states. I share the concern of the Secretary-General of the United Nations over the impact that this crisis will have on African countries. So here, too, we must show solidarity. We must show that we are ready to reach out to them, to provide solutions, to alleviate their financial constraints. Many of these African states, much has been said about the oil crisis and the collapse in the price of oil, are oil exporters. So they see their income, which can sometimes constitute 30, 40 or even 50% of their national wealth, collapse because the prices of oil collapse. We must also support them. So I also share this call for solidarity from the Secretary General of the United Nations.

RF: Emmanuel Macron wanted to be the one who would reform France. Today, we ask him to be the protector, to protect the French, to be more protective than reformer. With the resumption of control of the economy by the public authorities, in short, are we not reverting to a policy of the left, you who came from the right?

BLM: I believe that more than ever, these concepts of left and right are out of date …

RF : Colbertism, we will say …

BLM : When there is a crisis, the role of the state, the role of the Minister of the Economy and Finance, I confirm it, is to protect the French. And I fully assume this protective role, to protect employees by saying that rather than being unemployed, we will pay your wages. Yes, it is very expensive. It will probably cost more than 11 billion euros. Well, we will pay these wages which will guarantee short-time working because we prefer that rather than having millions of French people who register unemployed with all the loss of skills, all the human loss that this represents. We prefer to bring government guaranteed loans to companies rather than seeing them disappear. We prefer…

RF : So it’s the return of state power ?

BLM : Establish a solidarity fund for traders, artisans … The power of the state has never disappeared. But it must be exercised at the right time. And today, it must be exercised to the full because, precisely, we want to protect our economy, protect our employees, protect our small entrepreneurs and avoid an economic and social collapse of our country. The state has always been at the heart of the French nation. And it is more so than ever today, because we are in a time of crisis.

CB: For companies, you have decided to postpone the charges for the month of March. Are you going to do it for the month of April, for the month of May? Which companies are you going to nationalize? In which sector and for how long?

BLM: We will carry over social and tax charges as long as the health crisis lasts. We will not interrupt the postponement of social and tax charges for example for a restaurant that closed in March, if in April it still cannot open. So, in our policy, there is a desire to protect as much as possible. There is also a concern for consistency and continuity. We are not going to interrupt a device when the economy has not restarted. I think it would be completely absurd. Regarding the nationalizations of state support for certain companies, I sent the President of the Republic a few days ago a list of companies which are today the most vulnerable on the markets by the current situation. This can range from the automotive industry to air transportation to other sectors. I also offered him a number of options that can go through equity, recapitalization or nationalization. But I want to be very clear about nationalization: it is not all about suddenly having the state that starts to manage the whole economy, I never believed in the administered economy. It is simply a question of having the State which protects, for a limited period, companies by taking a stake or possibly by making a temporary nationalization, I say temporary because the State, I never believed it , is not intended to manage businesses in the commercial sector in place of entrepreneurs. On the other hand, it is its responsibility to protect strategic assets, it is its responsibility to protect industrial flagships to prevent them from being destabilized by this crisis.

CB : Zero unemployed this year?

BLM : No, I will not make this commitment. I think it would be irresponsible. And I cannot tell you on the one hand that the crisis will be long and lasting, and tell you on the other that there will be zero unemployed at the end of the year. I think that would not be credible. I have always had a language of truth since the beginning of this crisis. So I will not make this commitment. The only commitment that I will make is that we will fight with all the members of the government who work on this subject, in particular Muriel Pénicaud [ministre du Travail] to protect jobs and employees as much as possible.

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