Bruno Le Maire believes that the recovery plan should not take place before September or October. Do you think this deadline is too far away?
You have to go faster, that’s undeniable. The first necessary recovery plan is already to restore confidence. It is undermined by technocratic orders and counter-orders that we hear about deconfinement. As of Monday, companies will have to support the return to work without delay. To delay would be dangerous for the viability of the recovery. Especially since the French economy was the most affected in Europe by the crisis, which was tackled in a situation of relative weakness, with public finances and a situation of the labor market more degraded than elsewhere.
Can this braking more pronounced in France be explained by certain measures put in place by the government, such as partial unemployment, more generous than in other European countries?
This partial unemployment scheme is a good thing and it undoubtedly facilitated the confinement of the French. But that must not be turned against the national interest. This involves the return of the French to work. Let us be careful that this partial unemployment does not turn into a real unemployment trap. We sometimes feel the temptation for some companies to rely on this system, while some employees may want to delay their return to work until we have reached zero risk. But zero risk does not exist, unlike social risk. If partial unemployment is a safety net, recovery should not be caught in the cracks.
What do you recommend for the recovery plan?
We must devote a substantial budget envelope, commensurate with the unprecedented crisis we are going through. The government’s support plan represents 110 billion euros, and it will no doubt be necessary to devote as much to stimulus to reach, in total, a sum equivalent to 10% of GDP, which seems to me to be a good order of greatness.
What should these funds be used for?
This plan should notably be used to finance the recovery of employment. I therefore propose that the coverage of short-time working be gradually reduced and that, in return, the employers’ costs be reduced considerably for several months. This should allow a massive return to work for people who are partially unemployed.
A specific device is also imperative for young people who will enter the job market and must not be a sacrificed generation. One could imagine a “zero burden” employer scheme for two years for young graduates.
How to revive sluggish consumption?
Several levers can be operated, some of which do not cost money. This is particularly the case with the opening of stores on Sundays, which would allow traders to make up for some of the lost time. Relaxation of sales periods could also be useful.
In addition, public money can be used to stimulate consumption in disaster areas. I am thinking of systems already in use, such as the scrappage or conversion bonuses for the automotive industry, with environmental criteria. A targeted VAT reduction also seems necessary to me, for hotels or restaurants. This will not lower prices, but will allow them to absorb the shock by increasing their margins. Finally, why not experiment with reduction coupons distributed by the State or local authorities, in favor of specific sectors?
Does the stimulus plan also have to be a supply plan?
This crisis is unprecedented in that it affects both supply and demand. Support for production must be organized through capital contributions (equity or quasi-equity) made by the State and the regions in favor of small businesses. It would be a one-off aid, the state having a vocation to get out. We must also go much further on the cancellation of social and fiscal charges. The government has refused to confirm this for weeks, adding to the uncertainty for businesses at a time when they do not need it. He is changing feet, but a little late. We must go much further, and extend these cancellations to all companies that lost 50 to 70% of their activity during containment.
Is the fall in production taxes necessary in this context?
Deleting them is not going to happen overnight. But a clear strategy needs to be set out which outlines a path for a progressive reduction of these taxes, especially in industry. The State must define a timetable and a method for achieving this objective, in consultation with the local authorities.
To facilitate recovery, should environmental constraints be reduced?
These are not constraints, they are imperatives. We must build on these imperatives to build strength. The thermal renovation of buildings or the transformation of the car fleet are formulas which have worked well and which have gigantic potential. From this point of view, the crisis is a chance.
Should we promote de-globalization?
We should not throw globalization with the bathwater. Withdrawal would be the worst thing and you cannot fight global crises without a global approach. But if you have to keep thinking global, you have to do it differently. We must probably consume differently and probably produce differently. Three months ago, robotizing and further digitizing our economy was seen as a fear of jobs. Today, this can be a way of the future to allow the relocation of a number of companies. Now is the time to make up for lost time, by promoting investment through very effective over-amortization mechanisms.
Will the French have to work more?
It’s a controversial debate. But if we want to finance our social model, we must make sure that France accumulates more hours of work overall. This is a general reorganization, not just the question of the week or the day. This crisis, which we have tackled with mass unemployment, shows it: we enter the labor market too late and we leave it too early. In a way, moreover, the large countries which displayed greater economic and financial power are more resistant to this virus. They have developed more “antibodies” and are more resistant.
How would you finance your recovery plan?
Part of the debts can remain on the central bank balance sheet for a long time. And if states obviously have to reimburse them, it must first be absorbed by a lot of real activity and a little inflation. The only solution, to avoid going to huge bubbles that will eventually burst, is to produce and consume. At 10% recession, you can’t stay with both feet in the same shoe: you have to move to avoid dying. Any day lost potentially creates additional unemployment. But frankly, it would be more costly to do nothing: stimulus spending is virtuous because it is an accelerator of recovery.
Can we really avoid tax increases?
For me, raising taxes is a prohibited option. We tried it in 2010 and it didn’t work. France is already the most taxed country on the planet and I am not very proud of this title of world champion. I believe, on the contrary, in the increase in tax revenue by activity, not by the Lépine contest of new taxes and rates. This crisis also means knowing how to lighten the bureaucratic burden because it creates expense and hinders the creation of wealth …
You voted for the deconfinement plan. Do you regret the position of your party, which abstained?
By voting like this, I wanted to show that I was unambiguous for the principle of deconfinement from May 11. This gives me a great deal of freedom to challenge the often too administrative, sometimes contradictory and disempowering, implementation methods. The saga of masks and tests leaves a bitter taste, the rules of deconfinement on the school are of an incredible complexity, the methods of resumption of transport are very uncertain… Such confusion is difficult to bear for everyone and very ineffective .
To what do you attribute these trial and error?
Probably due to a lack of experience and late consideration of the issues. The government’s expression has often been cacophonic rather than symphonic. The mask affair was symbolic of the breakdown of trust in public opinion. We need a start. One cannot have a stronger distrust of political speech than elsewhere and, at the same time, a country which is recovering more slowly and considers that it can withstand a stronger recession than other countries. This is also the reason why there cannot be an economic recovery plan without a social dimension. We must restore equality of opportunity between the French and between territories. Everyone is responsible for themselves, but meritocracy only works if you are equal regardless of your social background.
You are critical. Does not the right also have a share of responsibility in the situation of France as it is?
Of course. I take my share since we have been in government. But France has reformed a lot, it’s a big country that must remain so. What interests me is what we are doing today and what we will do tomorrow to make this crisis useful, as it was in 2008 to give birth, I believe, to a stronger and more transparent financial world.