France, the UK and the EU: What the Future Holds

Dr Robin Niblett

Ladies and gentlemen, welcome to Chatham House. I’m delighted to be able to welcome you here for this meeting with Bruno Le Maire, the Minister for Economy and Finance in the Government of Monsieur Édouard Philippe and obviously, President Macron. I’ll let people find seats. There’s a couple left maybe here on the far right, though I think we still have some of the delegation to get in. The timing, obviously, of this meeting could not be better. France, the UK and the EU: What the Future Holds and there could not be a better person to give this talk at the moment.

Bruno Le Maire has had a longstanding political career, served in the advisory functions initially, in the Ministry of Foreign Affairs when de Villepin was the Foreign Minister of France. He joined Prime Minister Dominique de Villepin at Hotel Matignon, first as his Advisor, then as his Chief of Staff. Was elected as a MP, as a member of the Assemblée Nationale, in June 2007. Became Minister of State for European Affairs briefly of François Fillon’s Government, before then becoming Minister of Agriculture. And having continued his political career, he is now part of a Government that is truly transforming France and is transformative of France, but also, potentially, is going to be transformative for the European Union as well. Inevitably, here in the UK, but we’re very interested to know how transformative it will be for the UK/EU relationship as well, Monsieur Le Maire. But with a title such as France, the UK and the EU: What the Future Holds, we should be able to cover a broad range of topics.

We will have some prepared remarks and then there will be a chance for some Q&A, but let me just say, in advance, if I can ask you to try and stay in your seats at the end of the session, because Monsieur Le Maire has to get out very promptly at the end of this meeting. It is on the record. It is being live streamed. I’d like to welcome our Chatham House members, who are joining us outside this room, and you can tweet at CHevents with the hashtag.

Monsieur Le Maire, welcome to London, but welcome to Chatham House, in particular. We look forward to your remarks. Thank you for coming.

Bruno Le Maire

Thank you [applause]. Thank you for your kind words, ladies and gentlemen. Last time, when I came here in Chatham House, I was in charge of European Affairs in the Government of François Fillon and there was, I think, around ten people in the room. Now that I’m in charge of Finance, there are around 100 people in the room, so obviously, the British people give more importance to finance than to Europe.

From Paris, it seems the United Kingdom has been consumed by one issue, since June 2016 and we can, of course, understand why. Brexit. Brexit is an important issue for your country. As far as France is concerned, and I explained that many times, we deeply regret the decision taken by the British people to leave the EU, but we respect this democratic choice. It is sad to see a close ally and partner leave the EU after 40 years of a mutually beneficial union. It is sad to see your country step out of a common market that it helped design, but it is a fact and we have to do with facts, and the world did not stop on June 23^rd, 2016. Life goes on. Now that the referendum is over, we need to move on. Yes, Brexit will have consequences. Important consequences for the UK, for France and for Europe, but we should not see the future of the UK or the future of our relationship only through the prism of Brexit. We always had a very important, valuable relationship and my goal is not only to maintain, but to develop and to enforce the relationship between the UK and France.

Our common history and our ties go much further than that. The UK and France can do a lot together to face global challenges, such as climate change, the fight against inequalities, defence and security. On all those topics, we have a lot to do together. We stand firm in our promotion of fair trade and of a rules-based order at a time when some countries are calling this into question. That is why I came here today to explain what is going on in France, how Europe is changing, and how we see our shared future in the world.

In France, we were faced with a choice similar to yours in 2017. Of course, the Brexit Referendum and our Presidential election were not one and the same thing, but when you look at the issues underlying both votes, you can observe many similarities. They were about determining the long-term future of our countries, whether to trust in the EU and to strengthen it, or to split from the open project. We, the French people, could have followed a similar road as you. We should never forget that at the second lap of the Presidential election, you had, on the one side, Emmanuel Macron and Europe and on the other side, Marine Le Pen and a, kind of, Brexit.

The French people made a different choice. They decided to try something totally new. A young President has been able to convince men and women, from different political parties, to work together to transform our country and more unusual still, these days, a leader who openly campaign on a pro-European platform, who offered to embrace globalisation as an opportunity and not to go back to inward looking strategies. This leader has been elected, so now we have a clear choice in France, a clear majority, and a clear vision for the future of France, the future of Europe and our place in the globalisation.

Emmanuel Macron’s diagnosis is clear. People, of course, are worried about globalisation. They have the feeling it only benefits some parts of the country and society. They fear unemployment. Identity is a growing concern, migration is a growing concern, but he and his Government do not believe the solutions will come from closing our borders and having debate about our identity. The solution is to transform our economy within a more integrated Europe. The solution is to have a more competitive economy able to provide jobs to everybody in France and to build a new French prosperity. Just a year ago, many would have said, including in his room, that France was incapable of change. Many were saying that we were the sick man of Europe, the stagnant economy, political turmoil and adverse to reforms and change. I think that we have proved them wrong, in the past few months.

We have moved quickly to implement the President’s campaign manifesto, to remove the obstacles that have stopped France from fulfilling its potential for decades. We have reformed labour law. We have overhauled the tax system, and we are preparing the future of our country by changing the business environment, by cutting red tape, by investing massively in innovation, including disruptive innovation, and by revamping our education and vocational training systems. Because skills are the best protection a Government can provide to its citizens and we are doing our utmost to develop a new culture, one that is more open to business, more open to risk taking, one that embraces opportunities and changes. France is changing. France is back, and Europe is back.

Let me start with a simple fact. Growth is back in the eurozone. Unemployment rates are falling within the eurozone. Countries that suffered most severely from the crisis are recovering, I mean, Ireland, Portugal, Spain, even Greece. In France, we have reached a 2% growth rate. We now need to go further. Europe, first of all, needs to take the lead, not only on economic recovery, but on innovation. Innovation is the key if we want to remain in the race between China and the United States. The economic recovery is a necessity, but it won’t be enough. The battle for innovation, the battle for disruptive innovation is the key if you want Europe to remain a leader between China and the United States. They’ll be aware of that.

The EU faces a clear choice on artificial intelligence, on space, on energy storage. We need to be global leaders, or we will go out of the historical race between China and the United States. In a few years’ time, otherwise, our cars, our spaceships, our wind turbines, will be operating solely with foreign technologies. That’s the choice we have in our hands.

Innovation is not only a matter of competitiveness, it is a matter of sovereignty and independence and we want to be and to remain an independent country, within an independent Europe, as much as you do. Independence is directly linked now to innovation and to the ability of having the possibility of developing new technologies. That’s why we decided to create, in France, a ten-billion-euro fund for disruptive innovation, that’s the first time that such a fund has been created in France. It will be financed with the state of public assets and revenues from privatisations. This fund should pave the way for a European fund.

I know that many people I explain, “Well, your fund is too narrow, it won’t be enough to fund disruptive innovation,” but it is a starting point, and I hope that in a few months, we will be able to create exactly the same kind of fund for disruptive innovation between France and Germany. And a in a few years, I hope that we will be able to have exactly the same kind of fund, among European partners, with the possibility of investing around two billion euros for disruptive innovation, as our American friends are able to do with the so-called DARPA. As Churchill said, “Either we take technological change by the hand, or it will take us by the throat.”

Europe stands also for free and fair trade. That’s the second point on which I think that we should gather our thoughts to try to convince our partners and to explain to the rest of the world that openness is a key, that free trade is the right track and protectionism, dead end. Our strength is to be open, open to globalisation, open to trade, open to investment. Investment fuels growth. It is what is best for society and the economy. This is why we are strong advocates of free and fair trade. Free, because protectionism is the worst economic approach. It leads to less innovation, to lower competitiveness, to higher prices and thus, lower growth. Fair, because if we allow protectionism to rear its ugly head once again, or if we stick to the sole pursuit of narrow self-interest, this can only lead to tensions, a race to the bottom on taxes, on trade, on social protection, that will damage growth and damage the livelihood of our citizens. There will be only losers. That’s why, on steel and aluminium tariffs, Europe is determined to take appropriate measures, either to arrange a procedure within the WTO or to adopt counter-measures, if the American administration sticks to the plans it announced last week.

I invite everyone to look at the history of trade wars. It is not a pretty sight. Trade wars make no winners in the long run. Let’s not repeat the mistakes of history. Protectionism is a dead end. It leads to short-term gains and to long-term disasters. But let me be clear, being open does not mean being naïve, as we have been too often in the past. We can be both open and protect our strategic assets, those which are essential for our future and long-term autonomy.

Protecting does not mean protectionism. We need to do that more assertively in Europe, that is why we’ll fully support the European Commission’s proposal for a European framework to screen foreign direct investments. If some foreign investor wants to buy a key technology, a strategic asset in the military field for instance, we need to have the possibility to say no. Europe must have the courage to be open to foreign investment and to be always in the possibility to say no to any investments that might be a threat to a key technology or to a strategic asset. Europe has to show it is capable of both being open and defending its own interests. That’s exactly what the United States and China have been doing for many years. It’s time for Europe to change. It’s time for Europe to be strong. It’s time for Europe not only to commence the word, but to decide what we want the future to be.

Europe needs to stand up for its values. What does this mean? It means inventing our own model, one that promotes our interest and abides by our core values, fairness and solidarity. I just give you two examples.

First, the taxation of internet giants. Let me be very clear, we do not want to target any huge company. We are not targeting Google, Apple or Facebook or Amazon. These companies are most welcome in France and in Europe. Amazon has been creating more than 7,000 jobs in France. They are mostly welcome, but they have to pay their due taxes. I cannot ask the SMEs in France to pay their due local or national taxes and explain that for Amazon, they won’t have to pay the same level of national or European taxes.

Our plans in this area are not a move against specific American companies once again. It’s about adapting our corporate tax system to the new economic reality, to a digitalised economy and to ensure greater fairness for everybody. We simply can’t go on with internet giants making huge profits in European countries and paying low amounts of taxes, because it is not fair, and because it is also vital for the funding of public goods and service public everywhere in Europe. That’s why it’s vital that Europe acts and adopts an efficient and rapid solution by the end of 2018.

Citizens won’t understand if we don’t, and I know that everybody has already explained to me, “Well, it will be too difficult, it’s a tricky issue. Your French proposal is very interesting, but let’s think a little bit more about an improvement of your proposal.” No. Now, it’s time to decide. It’s time to prove to our citizens that with this question of fairness, when what is at stake is fairness and efficiency at international level on the international stage, Europe is able to decide. Europe should not be afraid of deciding. Europe should not be afraid of its own economic, political and I would say, cultural power.

Second example, cryptocurrencies. I am a strong supporter of FinTech and financial innovation more generally, including blockchain. France is a key player in that field but being open to innovation does not mean forgetting a Government’s responsibilities towards its citizens. We have a duty to protect them against the creation of speculative bubbles, to warn them that bitcoins are risky assets and finally, to make sure that those who trade in them, abide by the same anti-money laundering and counter-terrorism standards as those trading in the other financial assets. One again, it’s about fairness.

Europe should be proud of its unique model. A model based on a single market open to the world, combined with strong social values. A model including high levels of social protection and solidarity, let’s be proud of that. A model based on good education, let’s be proud of that. A model for good education for all and non-discrimination, to mention just a few pillars of that model. A model that has allowed us to avoid big rises in inequality. This is a key element of the European model. We are deeply convinced that inequalities are, not only from a moral point of view, something unacceptable, but from an economic point of view, a stupidity. And we are the single continent in the world able to defend that idea that we have to fight against the rise of inequalities. Inequalities not only among the nations of the world, but inequalities inside all nations because inequalities feed populism. Inequalities in our nations feed extremist parties. We all know that. We all have to draw the consequences of that reality.

We should, for that reason, not be ashamed to promote our European model that gives a meaning to globalisation. People are waiting for a sense, a meaning, for globalisation. Economic prosperity is not enough. Globalisation, what for? Prosperity, what for? For education, for the fight against climate change, for the improvement of the situation of everybody, for the fight against inequalities, for the possibility of being open to other cultures. This is the meaning of globalisation, but globalisation only for the sake of being more and more greedy, making more and more money, creating more and more inequalities among nations and among people, this would be a non-starter for European nations.

Last but not least, if we want to go this way, the eurozone needs to be in the forefront and needs to change. In recent years, the Euro has been a source of fragility rather than a common asset for our economies. We did not finish off the job of building the Monetary Union when we created it. This is one of the reasons why the financial crisis turned into a eurozone crisis. Our top priority is to transform the economic and Monetary Union to make it an anchor of stability and prosperity in the world.

The eurozone is much more resilient than it was, but it still needs to be complemented. First steps, a fully-fledged banking union, including a backstop to manage effectively a future banking crisis and a genuine single market for capital. This will be even more important, post-Brexit. Greater tax convergence amongst the countries who share a currency is also essential, and our goal is to reach a tax convergence between France and Germany on corporate tax by the end of this year. We also advocate providing the eurozone with a fiscal capacity. It will take time, of course, but it is needed to finance common public good and to help absorb economic shocks the eurozone may face in the future. It will foster economic convergence. We can’t have economies going in completely different directions in a Monetary Union, this would be foolish.

The EU is back. The EU is reinventing itself. Now comes the unavoidable question, what will this mean for its new relationship with the UK? Let’s talk about Brexit. Even if I must recognise that this is not a matter of discussion in France. I will be very frank with you, we are not discussing about the Brexit. The Brexit happened and that’s it. Now, we have to draw the consequences of the Brexit, but we have also, to focus our energy on the integration of the eurozone and the improvement of the functioning of the European construction.

I read, in some papers, that France is being the toughest in the current negotiation. This is not correct. We are not in favour of the hard Brexit, nor in favour of a soft Brexit, we are in favour of the fair Brexit. A Brexit which would be in the interest of both the UK and Europe. But once a country decides to leave, there are consequences. You simply cannot be in and out at the same time. The EU is a club and it works like any other club with its membership rules. Leaving the EU has consequences. Consequences on our future relation.

Prime Minister May was very clear, in her speech last week, about the UK leaving both the Single Market and the Customs Union. We will negotiate a Free Trade Agreement and I hope an ambitious Free Trade Agreement between the UK and the EU. Every FTA is special because it is the result of negotiations and each negotiation is different. But an FTA is an FTA. It will deal with the strategies and facilitate the exchange of goods, of course, it is our common purpose. But it won’t be equivalent to the Single Market. It won’t enable full access to the Single Market, otherwise it would mean that the UK is still a member of the European Union.

On financial services more specifically, there will be no financial passport, and it was reassuring to hear Prime Minister May acknowledge that last week. This means that investiture cross-border financial services cannot be offered into the EU 27, in the same way as today from the UK. The rules will change. We do not believe that financial services can be part of the Free Trade Agreement because financial services are not goods. They cannot be traded and supervised in the same way. For financial services, we already have a functioning approach with – although not the same as the passport, offers many opportunities, the EU regime of equivalence. It works well for other key financial partners like the United States and Japan. We strongly believe that the EU regime of equivalence is the best basis for the future of the financial relationship between the UK and Europe.

We have a clear and orderly process in place to handle the Brexit negotiations with the European Commission and the 27-member states. We will stick to this co-ordinated and united approach. This being said, the United Kingdom will not suddenly be cut off from the rest of the EU, once it leaves. We will remain deeply interconnected. Today, our companies, large corporates and SMEs, import and export daily, they are deeply interconnected, and it will remain so after Brexit. Of course, they need to prepare and adapt to the UK exiting the Single Market, but goods will continue to be traded after Brexit. It is in our mutual interest to ensure the best possible arrangements with no tariffs or the lowest possible tariffs between the UK and Europe.

We’ll also keep sharing and defending European values on the world scene. Recent examples show that we can keep working together. Minister Philip Hammond joined myself and three fellow Finance Ministers in signing a letter on the recent American tax reform to express our concerns on its implications for our economies. On a more positive note, I welcome the Chancellor’s support for our efforts to appropriately tax internet giants.

On green finance, we have shared best practice to promote a more responsible approach to finance. These three examples show very clearly that even after Brexit, we still have common interests, common values and we have to work together to build a better world. We need the UK. We need the British people. You are a big country. You are a big nation. You can be proud of being British, as I am proud of being French, and I am deeply convinced that we have a lot in common, a lot to do together to improve the situation of the international stage and of the world.

We will have to build on this continued partnership to defend together, on the world scene, the values we share. Because the world is changing, there is a rise in international tensions. Some of the key institutions underpinning the international order as we know it, are being called into question, I mean, the UN, the WTO, the IMF. This world order arose from the remains of the Second World War. The United Kingdom and France were pivotal in designing it. Now, we need to be ready to defend the merits of the principles it relies on. A rules-based approach, a global level playing field, openness, freedom, fairness, but we also need to reinvent and adapt this order to the new balance of powers and global challenges we face. We need more than ever to reinforce international co-operation to answer the numerous challenges that face all countries today: climate change, migration, the impact of new technologies on society, rising inequality, terrorism. In all these areas and many more, countries need to work together. France and the UK need to work together, often at a global level.

President Macron proposed a new world deal in Davos for a renewed multilateralism. I hope, really, that the UK will help us build together that vision for a fairer, more inclusive globalisation, based on multilateral rules agreed and respected by all. We see, in our own countries, how globalisation is called into question. If we want globalisation to be a success, if we do not want nationalism to rise, we need to act together.

I believe in the future of the nations. I do not believe in nationalism. I believe in a Europe based on strong nations, but even after the Brexit, I believe in the strong relationship and the strong friendship between not only the UK and France, but the British people and the French people. As you see, despite Brexit, we share, and we still share a great deal in common and we have many reasons to promote and to defend those shared values at a global level. Yes, United Kingdom is leaving the EU, but Brexit is only one part of our relationship. It does not mean the end of our co-operation. It does not mean the end of our friendship. We can work together to develop common and positive projects and the most urgent thing for us to do is to defend a modernised multilateralism, based on the rules, fair rules. The biggest harm Brexit could cause would be to prevent us from building something new together. I thank you [applause].

Dr Robin Niblett

Thank you very much, Monsieur Le Maire. I know that you have a limited amount of time, but you laid out a very clear set of messages, both on your ambitions for France, your ambitions for what you call Europe, but many here might call the European Union, in the sense that the use of the word ‘Europe’ creates a sense of exclusiveness, for those who are inside the European Union. But, at the same time, a set of plans for what could be done as well as you said bilaterally, between the United Kingdom and France, especially in building or sustaining a rules-based international order, which as you said, both countries are so committed to.

There will be a lot of hands going up and what I will do, in a second is maybe, if you don’t mind, as we’ve got such a short amount of time, is take some groups of questions. And I’ll keep an order of them, rather than going one by one, at this stage in the day, and we have some paper here for you, if that helps, to be able to note things down on.

If I could just pose one question ‘cause I’m sure we’ll get lots of questions about Brexit here. Let me ask you a question about France, in particular. You talked very passionately about the need to tackle the rise of inequality, and that this is one of the biggest plans you have for France, and particularly the need for reform and the reforms you talked about. Now, France is a country that, as I understand it, has public spending above 50% of GDP currently or certainly that’s what you inherited in this Government. Do you think there’s going to be a deep tension between the ability for the French people to feel that you’re developing an inclusive domestic programme and one that, at the same time, is going to have to reduce that proportion of French public spending within the French economy, that’s been a defining feature of the French economy for many decades?

Bruno Le Maire

I think that we do not have any other choice but to reduce the level of public spending, the level of taxes and the level of public debt. If the public expenses would have been the right answer to unemployment and to the lack of growth, I think that France should not have any difficulty with unemployment and should have a level of growth of five, six or 7%. Because we have the highest amount of public expenses among Western countries and the fact is that on the one side, you have the highest level of public expenses and the result of that is unemployment and a weak growth. So, I have been explaining to the people, like Emmanuel Macron, that we have to try something new and that’s exactly why Emmanuel Macron has been elected and that’s exactly why I have decided to work with him. We want to try something new.

I don’t want to live anymore – I’m 48-years-old, I don’t want my children to live in a country where the unemployment rate remains constantly around 10%, that’s something unacceptable. That’s not a future for young people, so I don’t want to rely anymore on public expenses. Of course, we need some public expenses to fund the schools, universities, hospitals, but otherwise, we have to rely on the creation of prosperity by private companies. We have to rely on investment, on innovation, on the ability of creating new jobs in private companies. We want to try something new because the old model has been a failure. The old political model has been a failure. The old economic model, the so-called French model, has been a failure. We are still very much attached to the balance between solidarity and what I would call a spirit of conquest, but we have to get rid of a huge debt, huge public expenses, the lack of growth, the lack of prosperity and that foolish unemployment rate of around 10%.

Dr Robin Niblett

Thank you. Right, let me take some hands, and I’m going to see – couple in the front, and I’ll make sure I go to the side as well. So, lady here at the front, can you pass it to the gentleman there afterwards, next to you? We have the lady first and then you sir, and then I’m going to take a couple over here. Yeah.

Frederica

Thank you. My name is Frederica and I’m a member of Chatham House. I’m Italian and I’m deeply saddened by what happened last Sunday, but I genuinely believe that if the EU would have made a bigger effort in addressing certain challenges from people, then maybe the result and the outcome might have been different. There is a feeling that the EU is fairly detached from what’s happening and it’s not really listening. In this sense, don’t you think there is an opportunity for the EU to improve the way they communicate with citizens?

Dr Robin Niblett

Okay, pass the microphone to that gentleman there, so I’m going to take two then, over here.

Chris Morris

Thank you, and it’s Chris Morris from the BBC, so inevitably, a question about Brexit, I’m afraid. You mentioned services. We know, I think, that you can’t cherry-pick in the Single Market, but we’re not asking for the Single Market anymore, at least the Government isn’t. A Free Trade Agreement is rather a different thing, people cherry-pick within them all the time. Why do you have to rule out the possibility of a future Free Trade Agreement, which could include more elements of services, simply because there isn’t an example of that at the moment? Can you not think perhaps more ambitiously, given the interconnectedness about which you speak?

Dr Robin Niblett

Okay and let me just take two questions here. Yeah, on that side, yeah, please.

Member

Merci Monsieur [mother tongue].

Dr Robin Niblett

You have to introduce yourself there. Speaking French won’t do it by itself.

Member

The basis of Chancellor of the Exchequer preferred about discourse Français, Paris, voilà. But when the President of the Republic came here in January, you said, “Brexit has happened, Britain has decided.” Actually, Brexit hasn’t happened. A vote happened and barely 37% of the British people voted, the majority did not. Brexit will happen in January 2021 and so, when the President came in January, he said, and I quote, “If tomorrow or the day after the UK decides to change, it’s clear we would look with kindness on this.” That was the Macron doctrine, now there seems to be a Bruno Le Maire doctrine. We’ve already left and off you go.

Dr Robin Niblett

I think you – we need to move on, was your opening line, which I think is what you’re referring to. Just pass it back to the lady behind you there and I will take these two. I’ll take you next one.

Toni Patin

Thanks, Minister. I’m Toni Patin from Reuters. Just a follow-up question on the Italian election. Do you see Italy’s new political landscape as complicating process – progress, sorry, on eurozone convergence, and what, kind of, Government is Macron hoping for from Italy?

Dr Robin Niblett

Okay, let’s just take those four and keep the microphone there, yeah. I’ll let you group them any way you want.

Bruno Le Maire

Yes. I will answer to the post-last – pre-last question. By definition, BLM doctrine is the same as Macron doctrine, let’s be very clear on that. Otherwise, I run the risk of not coming back a second time and it won’t be ten people or 100 people in the room, it will be zero people.

Dr Robin Niblett

We’ll have a cup of tea together, it will be fine.

Bruno Le Maire

So, I think we are exactly the same if the UK decides to change and to have a vote and to organise a new referendum, but it’s up to the British people to decide. But I will make a personal confidence, I must tell you that I’m very much attached to the personal links between the UK and France. You know, I’m sometimes perceived as a Germanophile, a man who speaks German, who likes Germany, it is true, but as a matter of fact, I also like the UK and I also speak British.

On Italy and the vote in Italy has not been a surprise. Everybody knew that the Five Star Movement would be – would get the victory, unfortunately, and we know why. Because we have let Italy alone. When I’m saying we, I mean the European Union, the European countries. Italy was faced to maybe the most important migration crisis in its history, and we have been unable to define and to decide the right answers to that crisis. We have taken some decisions, of course, but decisions were not at the level they should be to meet the concern of Italian people. And we should always bear in mind that if we want to avoid the rise of populism everywhere in Europe, not only in Italy, but in Spain, in Germany with the Alternative für Deutschland, in France with the Front National and other parties, we have to meet the concern of the people.

It is not up to technocrats to decide what is good for the people. The people are waiting for security, stability, jobs, respect, attention to their identity and culture, and we have to give the right answer to that. If we give the impression that we do not care about the people, there will be a revenge from the people and that’s exactly what we have experimented in France, in the UK, in Italy, with the very last vote, and in Germany, with the Alternative für Deutschland, with more than 10% of the voters. As a Politician, I have always in mind the necessity to meet the concern of the people.

A last remark on the services under FTA. I’m not explaining that no service should be within the Free Trade Agreement. I’m just speaking about financial services and I just wanted to make very clear that financial services are not goods like any others, because it is a matter of stability. All banks, all financial institutions have to abide by very strong rules, and I cannot explain to my banks, to the BNP, to the Société Générale that they have to abide by stronger and stronger rules, and the counterpart of that, the advantage is that they have the Single Market. But, for the British banks, they will have access to the Single Market without abiding by the same rules. That’s why I’m deeply convinced that we have to redraw a very clear line between the FTA, on one side, and the financial services, on the other side.

I have been discussing that point with Philip Hammond this morning. I have a very good, very positive and very friendly relationship with Philip Hammond and look forward to listening to his speech tomorrow on the issue. That’s the beginning of a discussion with the UK on that and during the next G20 in Buenos Aires, we will have the opportunity to talk once again about that very important issue.

Dr Robin Niblett

And just on that point, you said, “Equivalencies could be the best basis for knowing that British banks and French banks are having to meet the same requirements.” The current equivalence agreements though for United States and Japan cover about 20% of financial services. Are we simply talking about providing this equivalence, expanding that 20 to 40 or 60% if not to 100? When you say, “Equivalence is the basis,” is that what you mean that it could be expanded beyond what exists with other countries currently?

Bruno Le Maire

Yes, I mean that, that’s exactly what you are explaining. Equivalence agreements are not covering all the services, all the financial services, maybe 20, maybe 30%, which means that we have to expand, to think about the possibility of expanding that, kind of, equivalences. But once again, it is a starting point and we will listen to the proposals of Philip Hammond and I’m sure that we will find a consensus.

Dr Robin Niblett

Okay. Just two more. There’s a lady and gentleman waiting there, yeah.

Michael Maclay

Michael Maclay, Club of Three, a club that Britain has not left and which you know very well, Mr Le Maire. Can I just build on the questions about Italy? We have an Italian Government that may or may not go in a deeply populist direction, but the driver of this is, as you mentioned, migration and freedom of movement questions that align Italy with Poland and Hungary and other movements around the European Union. I just wonder what is the answer to the question that you were posing, what do we, the elite, have to do? How can you win back the confidence of people? Now, migration and freedom of movement were very much the motor, some of us would say, of Brexit and so, this does have Brexit implications. What will you actually do, going beyond the analysis you just correctly gave, of what the technocratic classes need to do?

Dr Robin Niblett

Okay, and person next door to you, I can’t quite see who it is, yeah, yeah.

Pauline Bock

Hi, I’m Pauline Bock from New Statesman. I was wondering if you could tell me a bit more about what you think about the rise of populism in Europe, because you – and especially in France, as you mentioned that you need to give people jobs and security and listen to them and give them respect, but at the moment what are you offering to the voters of the Le Pen – of Marine Le Pen, because you changed the labour law, which means that people can be laid off more easily? I come from this place near – in Moselle, which is really not rich, and I don’t see how any of the invasion you talk about is going to help anyone there.

Dr Robin Niblett

Can – you need to be quick ‘cause I – ‘cause we’ve got very little time. We’ve done a lot of questions at the front. One more here and then I’ll take the young gentleman there, with the glasses, yeah.

Bénédicte Paviot

Hi, Bénédicte Paviot, France 24 and also, President of the Foreign Press Association. Monsieur Le Maire, has the EU, and I do mean the European Union, got a communication problem with its citizens? Is Brexit worse than the Italian result and what else can we expect? So, basically, has it got an EU communication problem or as you said to some of us earlier, is it an EU decision problem?

Dr Robin Niblett

Okay, gentleman there. Yeah.

Harvey Chandler

Thank you. Harvey Chandler, Political Intelligence. You’ve spoken a lot about a comprehensive deal not being possible between the UK and the EU financial services, but up until 2016, such a proposition was included within a financial chapter of TTIP negotiations. Is it the case that what’s good for the US, isn’t good for the UK in this case?

Dr Robin Niblett

Yes, this question’s come up a couple of times. Right, I think, as we’re coming up 6 o’clock and I’ve got to keep an eye on the front row, in front of me here, so you’ve got four questions there and I’m going to tack one on, ‘cause something that’s not been addressed so far, really hasn’t been much discussion about the eurozone reforms that you discussed in your speech here. Prime Minister Mark Rutte has come out with quite a different view and one that does not see the same, sort of, role that you’ve described for financial backstops, the, kind of, solidarity that you’ve described as an intrinsic part of the eurozone. Is there a danger that the Franco-German partnership is starting to look too strong to an EU 27 that doesn’t include, let’s say, the UK as the usual break?

Bruno Le Maire

I think that the Franco-German relationship will remain at the core of any progress within the eurozone and within Europe. I’m not explaining that Germany and France will decide alone on the side what is good for Europe and for the future of eurozone. I’m just explaining what is a fact. When there is a lack of impetus coming from France and Germany, nothing moves on. So, if we want a move, an impetus in the right direction, we need France and Germany to be together.

We also have to be open and we are open to any criticism, to any new proposal. I read very carefully, the proposals put on the table by Prime Minister Rutte from the Netherlands, and we don’t share the same assessment. I do not agree on many points, but we should avoid to make a caricature of the French positions. We are not only in favour of risk sharing and against any risk reduction, that’s not the case. I’m in favour of risk reduction, because I have to guarantee to my citizens that there will be financial stability within the eurozone. So, I’m in favour of risk reduction. I’m open to the reinforcement of the rules to guarantee more risk reduction, but the counterpart of that is that if we go the way of risk reduction, we should also have risk sharing. Otherwise, I don’t see any necessity of reinforcing the rules, if the advantage of that is not more solidarity among member states.

It is a double-track approach, not the single-track approach. France will not support a policy based only on the reinforcement of rules, because it is without any end. The end of a policy is the improvement of the life of every citizen, so if we are ready to reinforce the rules, we also want to have more solidarity among member states.

On the question of communication and decision. Many people explain to me, “Well, this is only a question of communication, Europe should explain more and more with better tools, how efficient it is and the results that they have obtained.” No, I don’t think so. The problem of Europe is not communication, it is the lack of strong decision. The problem of Europe is the lack of leadership; people are waiting for leadership. Every nation wants a leader. Every political history and political body needs a leader and there is a lack of leaders in Europe. We need leaders like Emmanuel Macron, able to explain their vision, a political purpose, and the way to reach that purpose. You can criticise that vision. You can be against that vision, that’s not the problem. The problem is the lack of vision, the lack of leadership, the lack of decision.

You should try to be invited at a European Council of Ministers. If you like discussions, you will be very happy, but if you like decisions, you might be a little bit disappointed. We need strong decisions, and I’m always advocating during those meeting of Ministers, it’s time to decide. We are not able to find a consensus on everything, but we have to decide. Otherwise, we run the risk, once again, of having the whole European continent month-after-month, year-after-year, decade-after-decade, being threatened by populism. At one time, populism might gain the power. Don’t think that populism is only a theoretical threat, it is a very concrete threat against our democracies and against our values, against our common interests and if they win, it is only because political leaders have not been able to take their responsibilities. Bear that in mind.

On Marine Le Pen, it will be my last answer, I think. No, and then, I have also, the question on Italy, on migration. I think that the right answer to the question of migration should be based on solidarity, efficiency, stability. Solidarity, which means that all the European nations, including the nations that are not threatened by illegal movements of migration, should bear the responsibilities of giving tools, financial means, funding, even troops to fight against illegal migrations. It is not only up to Italy or to France to be responsible for that. It is a question of common interest, which means solidarity. Efficiency, it means that we have to think about new tools in the nations from which the people come to have the most efficient solution to that very tricky and very sensitive issue. And stability, because we have to keep the same rules on the long-term, if we want to be efficient.

On Marine Le Pen, you told me what I am offering to the people that are tempted by Marine Le Pen or by the Front National. As the Minister in charge of economy, I’m just trying to offer jobs to French people. Of course, I’m trying to improve the labour market. I have decided to reduce the level of taxes. I have decided to reduce the level of public expenses and I’m deeply convinced that this is the right track, the right policy. But the purpose of that policy is not the reduction of public expenses or the reduction of taxes. The political purpose is the reduction of the unemployment rate in France. People need jobs. Young people need jobs and I want to be able to prove to the French people that the French economy, the French SMEs, are able to create jobs for everybody, everywhere in France. Thank you [applause].

Dr Robin Niblett

Thank you very much indeed. If you please stay in your seats, and I think you got an answer on financial services earlier. Thank you very much indeed, Monsieur Le Maire. Please stay in your seats.