Monsieur le gouverneur, welcome. We are very happy, in a small circle of parliamentarians mobilized on these issues, to hear your voice. You have been in office since November 1, 2015, and as a sort of sentinel for economic and international trade fluctuations, you pay close attention to all events likely to impact macrofinancial and banking stability, and the consequences they may have on geopolitical and industrial relations. Defense issues, of course, all questions concerning Europe's relations with the rest of the world, and intra-European relations, which we see today are also factors in numerous political games. I won't recall your prestigious career today, perhaps just a few elements: a great servant of the state, responsibility at the Treasury, financial counselor at France's permanent representation in Brussels, chief of staff to the Minister of Economy and Finance, and Director General of Taxes. Also a stint in the private sector as deputy CEO of BNP Paribas. Monsieur le gouverneur, the challenge for our commission is to clearly perceive the contours of the reconfiguration underway in our world. Trade, financial markets, monetary stability, price evolution are all subjects for which we ask you to shed light, if you would be so kind. We will also have several colleagues who will ask you questions on these subjects. Everyone knows that the global geopolitical configuration will have direct and massive consequences for the French. The return of war in Europe on one side, the unpredictability of the United States on the other, and the underlying rise of China are three factors, among others, that will structure the world we leave to our children. If there is one reality these developments highlight for Europeans, one can even say that national interests have never been so aligned. Confronted together with Russia, collectively hit by tariffs, and united against the risk posed by a potential Chinese supremacy. This new reality forces us to design a strategy that will guide France and Europe for the coming decades. So, Monsieur le gouverneur, what are, in your view, the opportunities our country can benefit from in this chaos? Could Europe replace the dollar as a reference currency? What measures can the European Union use to better protect the French from economic crisis threats? Can the Capital Markets Union, from the Draghi report, really help Europe capture new flows and boost growth? As for the challenges, we know them. The first is undoubtedly rearmament, and in this regard, an envelope of 1.7 billion euros has been announced to strengthen equity, and a 450 million euro fund linked to BPI France has been launched. Similarly, the defense innovation fund, which feeds startups in the sector, will be increased by 75 million euros. While all these measures go in the right direction, we know well that the scale of the efforts required is much larger, much more significant, and that the costing will have to run into several billions of euros. Even if these amounts have been mentioned today, the financing sources and arrangements are not yet fully finalized. What impact do you expect from the first measures taken by the government and sector actors? What initiatives will be taken to amplify the movement in a context of constrained public finances? What are our margins of maneuver? Also a question about private actors, financial institutions, banks, and individuals. Is a new role necessary for all actors currently active in Europe? There you have it, many questions, certainly too many. We've touched on all the major issues, but I'll leave you with the time you wish, between 10 and 20 minutes perhaps, and then we will have questions from all the parliamentary groups present. There you have it, Monsieur le gouverneur, I give you the floor and thank you very much for being with us today.
Monsieur le président, mesdames et messieurs députés, first of all, thank you sincerely for your welcome. I will try to keep to between 10 and 20 minutes, around 15, which seems a reasonable average. I won't answer all the questions you've asked. They are numerous, but we will continue our dialogue. But I particularly want to thank you for receiving me today before the Foreign Affairs Committee of the National Assembly. I believe this is a first, as I often speak before the Finance Committee. Please accept my warm thanks, Monsieur le président. But this also marks the novelty of the times, dominated, as you said, by the American shift, the international unpredictability, and, I believe, an expectation of Europe, which I will return to. These ruptures are as significant economically as they are diplomatically. So, I will naturally focus on the first field, but I would first like to dispel a preconceived notion. The economic and financial project is not just technical; it carries an essential political dimension of sovereignty. And then, I want to move beyond another preconceived notion. Economic Europe is not condemned to prolong its past inertia, which we probably regret here. It can and it must seize what is, I believe, a unique moment. I will start with the political and strategic nature of this project for economic and financial Europe. First, the challenge of power for France and Europe in 2025 is clearly defense. You spoke of it, but it is just as much the economy. The first leg will not advance durably without the second. And Europe is certainly not without assets. I will start there because I believe we are not sufficiently aware of them. We Europeans, and perhaps we don't have enough confidence. If there is an American virtue in these troubled times that we should perhaps draw inspiration from, it is confidence in ourselves. So, some of these assets: first, our single market weighs as much as the United States when measured in purchasing power parity. It is the first in the world. The European Union has an abundant resource that is not often discussed: private financial savings, which are higher each year and represent an annual flow of more than 1,000 billion euros. We have a highly qualified workforce. Our continent has trained more than 500 Nobel laureates. We have a firmly anchored rule of law. I believe that today, particularly, this is a strong value. And we have a shared social model. So, if America, alas, retreats and renounces its international leadership, the European Union is expected—I also see this in the many international meetings I attend—as a potential balancing pole by our other partners. But we must today transform these assets into power. We lack economic power first because our single market is much less attractive than the American market. It has the same size but remains far too fragmented, especially for innovative companies. Our financial savings surplus is considerable—more than 400 billion euros last year in excess savings relative to investment—and is partly intermediated by American finance and is insufficiently allocated, I will return to this, to the equity of European companies. In terms of research, we know transatlantic mobility remains very unbalanced. Nearly 120,000 European researchers work today in the United States. As a result of all I've just said, Europe has a technological lag. Private investments go too much to the existing sector and not enough to the innovative sector. I will cite our Nobel laureate, Jean Tirole. One of our Nobel laureates calls this the 'intermediate technology trap.' A word on our country. I believe France has the merit, the honor, of having long been the first and legitimate advocate of this necessary European economic sovereignty, more than our partners. But it must today, unfortunately, we know, restore its fiscal credibility if it wants to fully lead its partners. To finally have less deficit and less debt in France to regain more influence in Europe. There are, however, two areas where Europe, thanks to its unity, has conquered this sovereignty: commercial power and monetary sovereignty. A word on trade, even if the Bank of France is not directly in charge. The European Union is the world's first commercial power. It has the advantage of speaking with one voice here around the Commission. And I want to say very clearly, American protectionist measures are a lose-lose game where the initiator is also the most sanctioned. There will be this year in the United States, without a doubt, less growth than expected last January and more inflation. A word on the agreements announced in recent days with Great Britain and then China. To be less bad than the brutal measures of April 2, they are not good agreements. Still too many penalizing tariffs, with an unprecedented baseline of 10%. We may not have sufficiently highlighted in the English agreement how very high it is, and above all, still so much vagueness and unpredictability causing wait-and-see attitudes. I note in passing that there is both a protectionist shock and a shock of unpredictability in American policies, and the second is at least as prejudicial as the first. Europeans have so far kept their cool and their unity. I believe it was right to put response measures on the table but with a deferred entry into force to allow negotiation and hope for a de-escalation. Furthermore, Europe has every interest in forging commercial alliances with as many other partners as possible, from Latin America to Asia. And since I mentioned Latin America, I take the liberty of saying Mercosur, provided these agreements are balanced. I come to monetary matters. We were able more than 25 years ago to build a common sovereignty with the euro. It required political will and a mobilizing method. But recognized throughout the world, this European currency gives us today the indispensable autonomy in the face of American volatility. Let us remember—I must, given my venerable career—that in the 1980s and 90s, our monetary policy decisions were severely affected in Europe by decisions on the dollar. Today, these decisions belong fully to us, and despite a very turbulent international environment, the monetary situation in the euro area is clearer today. For the first time in several years, we have returned to what could be called the '22 zone.' What do I mean by that? Inflation close to 2%, which is our target, and a key rate we have brought back to 2.25%. Well below, we may not highlight this enough, American and British rates, which are today at 4.25%. This success reinforces the historically high support of the French and Europeans for the single currency, at 81% in Europe. I come to this point, Monsieur le président, a question you raised about the role of the dollar. Faced with a certain uncertainty about American financial assets, an expectation of diversification from our partners, strengthening the international role of the euro can indeed become a strategic imperative. This was not the case at the origin of the Maastricht Treaty, and I would like to say that the dollar's role will naturally remain important. This strengthening of the euro's role will rest on the choice of private actors and must therefore be progressive. But this external strengthening is in synergy with an internal opportunity: that of consolidating our common financial architecture, whether it be the Union for Savings and Investment, alias the Capital Markets Union, which I will discuss in a moment, and the supply of euro-denominated assets. I now come to what I called the second preconceived notion, if you will, that this European economic sovereignty is certainly desirable but an impossible objective to achieve. Let's recognize it, this ambition for economic union has been present from the beginning alongside the monetary union. It has been reinforced for 15 years with the projects for banking union and capital markets union, and it progresses too slowly. But if the American shift and this other threat, China, can have a virtue, and only one, it is to sound the alarm for Europe. However, let's not tell ourselves stories. Our collective response is not yet up to the challenge. But I believe that from this surge, we have the capacity, provided we have the will, firmly and durably. The installation of the new German government these days accompanies this window of opportunity. So, to do what? I will say it very quickly because I believe the Draghi and Letta reports in 2024, then the compass for competitiveness from the Commission last February, and then the strategy for the Union for Savings presented in March are remarkably convergent. They are long reports but very convergent on the necessary structural reform, and I emphasize that these necessary actions do not imply any additional budgetary cost. We need a general mobilization. If you allow me to cite what was the title of the Bank of France's annual letter addressed to the President of the Republic, the President of the National Assembly, and the President of the Senate, we took the liberty of calling it this time with a slightly more dynamic title than our usual literature, since we marked the shift from tetany to general mobilization. Is it dynamic or political? Political, no. Okay. Well, you will judge. According to three imperatives, 3 I's, or if you prefer the physiological image, size multiplied by muscle multiplied by speed. First I, we must integrate the single market more. This means betting on this size, which I spoke of earlier, but by removing internal obstacles in many areas such as services and energy. Second I, we must invest better, prioritizing the most promising breakthrough innovations, and in particular those related to artificial intelligence. And to achieve this, we need to develop European financial muscle through a true Union for Savings and Investment. A word in passing, we spoke for a long time about the Capital Markets Union. This name change has two objectives. The first is to clearly mark the end goal, whereas capital markets were just a means. And the second, which may have been less noted, is that it aims to encompass within a single union the banking union and the capital markets union. It is not about opposing banks or capital markets or moving from the former to the latter. That makes no sense. But the Union for Savings and Investment must better direct our abundant private savings, which I cited earlier, towards equity and venture capital in Europe. Europe does not lack credit, globally does not lack financing, but it lacks, compared to the United States, enormously venture capital and equity, always more favorable to innovation. Which brings me to the third I: innovate faster. Europe needs simplification, less bureaucracy, procedures, and simplified delays. This is not about deregulating. Unlike perhaps the approach of the American administration, the European approach will remain firm on objectives while being more agile in design. But on this agenda I just described of economic and financial sovereignty, I would like to insist strongly on a condition that seems key to me. We can only achieve this sovereignty under one strong, central condition: that political ambitions and the expectations of economic sectors are quickly aligned. And to do this, I would like to call before you for a mobilizing date, as in the past Jacques Delors knew how to do with January 1, 1993, for the single market, then January 1, 1999, for the single currency. It is about putting all wills under tension today without wasting time. It is up to the Commission to propose this date, and the Council to set it. And why not January 1, 2028? We must give ourselves 2 to 3 years to emerge more powerful and sovereign from the shift initiated by the current American administration. We spoke of an illusory Liberation Day in the United States. Christine Lagarde, for her part, called for a march towards European independence. Yes, but it is now or it will never be. And I believe it is essential to go fast. Business leaders also tell us this. Consequently, history does not wait, and the Commission should aim to present all these proposals this year. I add, if you will, a final dimension to this issue, which is an essential technological dimension of our monetary sovereignty. We can perhaps come back to this in more detail. We have a very strong digitization of the economy which accentuates in daily payments a dependence on non-European actors, notably international card networks and digital giants. Tomorrow, probably through the rise of what are called stablecoins, which are most often backed by the dollar and strongly encouraged by the American government, we have a serious risk of privatization and de-Europeanization of money. We cannot run this risk. These reasons lead our euro system to vigorously advocate for a digital euro, an instrument of public sovereignty, a banknote in the digital space. I conclude, if you will, while we commemorated last week the 80th anniversary of the end of World War II and the 75th anniversary of the Schuman Declaration. I believe the words of Robert Schuman resonate today with particular acuity. I quote him: 'It is no longer a question of vain words, but of an act, a bold act, a constructive act.' Yes, it is urgent to emerge from a certain economic nonchalance and to overcome the initial tetany in the face of the new American administration. Our mobilization must be general, to cite again the title of the Bank of France's letter. General. Why? Because this French-European response can only be collective, fair in the sharing of effort, and decisive in the speed of action. Provided these conditions are met, and then only, this can be the moment for our country, for France, and for Europe.
Thank you very much for this first general presentation which answers a great part of our issues with a plan you are deploying, having consolidated a number of reflections. In any case, a clear deployment. Perhaps before giving the floor, you spoke of a date and a march, as Christine Lagarde said, for European sovereignty. Is this a new treaty in your view? What form should this mobilization and this expression of greater sovereignty take?
The answer does not belong entirely to me. If I refer to the 1980s, there was initially, if you will, a treaty called the Single Act. It's not perhaps a very mobilizing term, but because it was accompanied by a number of changes to voting rules. Today, when I look at the content of the Draghi and Letta reports and this competitiveness compass, there is no need a priori for treaty changes. So I believe what is needed is to quickly put a certain number of proposals and initiatives on the table and make them into a package that has real economic and financial meaning. Today, if you allow me the expression, the pieces of the puzzle are far too scattered and each appears very technical. The various pieces of the single market were relatively technical. It was the whole that gave the momentum and economic impulse.
So, Monsieur le gouverneur, it would be a matter of having, if it's January 1, 2028, proposals this year and implementation across all Union countries by January 1, 2028, or sooner if possible. Very well. After this first presentation exercise, you will face questions from the parliamentary groups who will speak for a duration of 2 minutes 30. You yourself, if you have a response on that format, it's rather indicated, but obviously depending on the complexity of the question, there is no limitation to the minute. And then afterwards, independently, each parliamentarian will be able to intervene for one minute. There you have it, three exercises, three challenges you face this afternoon. The first speaker for the Socialists and allies is Pierre Pribile. Monsieur le député, take the microphone.
Monsieur le gouverneur, welcome and thank you for your presentation. Monsieur le président, my dear colleagues, I have so many questions that I will probably limit my remarks to two or three points. First point, this concerns the situation of cryptocurrencies, which appear in a controlled universe as a potential source of significant absorption, or even diversion, since we estimate cryptocurrencies at several billion euros, 300, 400 billion euros, which will gradually be diverted, potentially, from what you call the tools allowing precisely to be in sovereignty and control of the situation. And so we know, notably with drug trafficking, this situation could potentially explode. And my first simple question, so to speak, would be: how, in the position you are in, both at the national level and at the level of your 26 partners and the entire European monetary situation, can you arrive not at controlling but at mastering, in fact, the flows to avoid these flows being destabilizing, including in stock market control with hypertrading? This is a question that greatly concerns me and worries me, given the excesses we are witnessing with drug trafficking also taking an interest in our country and in Europe. Second point, you wisely mentioned the rule of three: integrate the single market more, invest better with AI, and innovate faster. And you, it seems to me, wrote a book, 'The Hope of a European,' a few years ago. Seen from the village of Saffres, can you add a fourth I to your logic, which would not be artificial intelligence but collective intelligence, which we could call 'lycée,' allowing also, I think, to be in a position to put more politics at the service of our citizens by using politics, and you possibly recalled the deadlines that in the past allowed the European Union to progress, to really have with this collective intelligence 'lycée' a capacity to give a destiny to Europe, because to take an old title, when Europe awakens, it will perhaps make China tremble.
Yes, in any case, to comment. First, Monsieur le député, thank you very much for these two good questions. On cryptocurrencies, I will start with a lexical clarification, if I may say. We do not use that term. We speak of crypto-assets. Why? Because cryptos, let's call them that, do not have the characteristics of a currency. And to be very brief, I believe the two basic characteristics of a currency are that it is accepted everywhere—the legal tender power. To pay in Bitcoin, you need the will of both parties, which is relatively rare. And secondly, and above all, there are those responsible for the value of the currency. And the first quality of a currency is the stability of its value. This involves controlling inflation. And I believe the Central Bank has rather well accomplished this mission for 26 years. There was a recent episode where we had to react quite strongly, but we are there. No one is responsible for the value of Bitcoin, which is marked by strong volatility. However, it can be an investment product, and I have always said and I repeat that it is reserved for savvy investors because it is not a risk-free product. The fact that there is freedom to invest in crypto does not mean there should be no regulation. And here, I will answer your questions very directly. I believe we first need regulations to prevent money laundering, to ensure investor protection, which I just mentioned. It happens that Europe has put in place this regulation, perhaps not entirely well known, called the MiCA regulation, which has been in force since last year, which France had already anticipated with the PACTE law of 2019. And we at the ACPR, with the AMF, control most of the service providers in what was called digital assets, alias crypto-assets. And believe me, we are extremely vigilant, especially in the fight against money laundering. There are recommendations on this. So Europe, the 27, apply these rules. There are international regulations on this, with which I cooperated with my G20 colleagues, which unfortunately have not yet been transposed, which have been transposed in most G20 countries but not in the first of them, if we follow my transatlantic gaze. So I hope a lot. There are today things under discussion before the American Congress. The equivalent of MiCA, at least in principle, bears the poetic name of Genius and is under discussion before the American Congress. I don't know very well how to pronounce on the genius of the content, if you allow me the expression. Perhaps a certain number of rules do not go as far as we would like, but it would still be progress. The issue of financial stability you cited remains. I believe that in the rules we are setting, if an asset claims to be risky, it can take risks. Pardon this truism, the important thing is that the investor is well informed. But for assets that claim to be stable, what are called in English stablecoins or stable tokens, then there must be extremely strong guarantees. What are the funds invested in? Can they be redeemed at any time at par, etc.? This is part of the regulation. I believe these are very desirable things in the United States. Thank you for citing my book, and I confess I was sensitive to what you said about the fourth I and collective intelligence. The Bank of France is independent, and I am always very cautious when I venture onto political terrain, especially before elected officials of the nation. But I can only have the greatest sympathy for the idea that we need to give more political momentum, perhaps political content, to Europe. Your expression of giving a destiny. Allow me just two reflections on this, but I do so rather in a personal capacity. The first is that I believe, unfortunately, what is happening in the world today gives us a practically obligatory political momentum. And I believe most of our citizens and Europeans realize well that if we do not react now, we will really be marginalized between the American shift and the rise of Chinese power, which you spoke of. We knew it, I would say, latently, but the acceleration of history we have seen in recent months shows it. It is clear that it is not from an eventual American problem that European salvation will come. European salvation passes through our own means, and a good part of our destiny is in our hands. I believe we are sending the urgency today. The other reflection is that I believe Europe is never stronger than when it is embodied in concrete projects for our citizens. The euro seems to me to be a good example. The euro was perhaps seen as quite technical at the start. I believe it has become today an enormous political project. We can testify, at least for those of us who lived through the youth of the euro. It happens that I was in Maastricht 34 years ago. That at the start the French referendum was extremely contested. There was really a high-quality and very tight political debate, and that today a form of consensus has been created around the euro. What are the next projects? Is it European defense? Is it the fight against climate change? Is it the acceleration of artificial intelligence? I proposed, moreover, with my German colleague, a community of artificial intelligence. Why do I still allude to Robert Schuman? Robert Schuman in 1950 took what was at the time the key resource, which is coal and steel. It is obviously no longer the priority today. I believe that today, if we want to pool our resources, it can be on artificial intelligence. Well, I don't want to lengthen the list of projects, but I believe that Europe as a general object is obviously an indispensable political tool. But if we want it to speak to our citizens in Côte d'Or or in my dear Aisne, it must be embodied in projects.
Thank you very much. The floor now goes to the Republican Right to Nicolas Forissier, and then we will hear Madame Dominique Voynet.
Thank you, Monsieur le président. Monsieur le gouverneur, thank you for being before us. I won't speak of the East or Côte d'Or, but I will speak to you from the Berry with two precise questions that are vast but in fact precise. First, I heard well what you said about the necessity, the obligation for Europe to wake up, so to speak, in the wake of the events you recalled and the evolution of the world. Europe has several engines, but it has always had a main engine, which is the Franco-German couple, and in particular the French engine. So my question is quite simple. Do you think this engine is in a state to play its role? I believe you yourself have spoken several times on the issue of public finances, the necessary control of public spending, France's debt, which is now at the end of the road, so to speak. What is your analysis on this subject? What are the conditions, in your view, for us to regain both the strength necessary to play our driving role in this reconquest of economic sovereignty, and secondly, to ensure that having swept in front of our own door, we are indeed recognized, because it is not necessarily the case today, by our partners as a real engine? I think I have summarized in a few words a vast debate, but I expect from you answers that, with all the independence that is that of the Governor of the Bank of France, allow us to have good, very pragmatic orientations. The second question is perhaps even more precise, it is the question of sanctions against Russia, and notably the government has just announced, within the European framework, the preparation of a new package of sanctions which would be, so to speak, I quote, 'massive.' So, we see well the notion, so to speak, of a warning to our adversaries, if I may say, Russian in the conflict we know. But nevertheless, do you consider that even this new package, as we know its contours, would be effective? Do you judge that the first sanctions were effective, given in particular the balance of power, including economically, between France, well, Europe, pardon, Russia, the West, and the Russian world? Thank you for these two questions, Monsieur le gouverneur.
So, thank you, Monsieur le député. On the first question, I believe we can all observe that French influence in Europe is unfortunately affected by the state of our public finances. I'm not saying it has disappeared. And I am quite struck, if you allow me a personal reflection, by the fact that on these discussions about strategic autonomy, which do not depend only on the current President of the Republic, even if I fully recognize that he has put them forward, but one can go back to General de Gaulle. Well, it is a very traditional French position. We were viewed with sympathy but sometimes with a tiny bit of irony. No one is ironic anymore. There you go. What is indeed unfortunate is that at the moment when we could capitalize, we do not today have the fiscal credibility that would allow us completely to lead the team. So my assessment is relative. It is not to say that we no longer have our place, etc., but we have the good ideas, the good strategy, and not quite the good physical form, if I push the sports analogy. So I believe we can regain it, and I said in my opening remarks: to finally have less deficit and debt in France to regain more influence in Europe. I will just allude, since I have already spoken of this Bank of France annual letter, to what we wrote on this, which for us is a very important component of the general mobilization: to reconquer our budgetary sovereignty, and this is a French project, whereas the economic and financial sovereignty I spoke of is a European project. But the two must go hand in hand. Without being too long on this, but I refer you to our detailed figures, I hope, clarification on this. I believe what our country should aim for is also a date: to return to 3% deficit in 2029. And it's not the fetishism of the 3% figure, it's that for France, 3% deficit corresponds to stabilizing debt relative to GDP, because it is the primary balance excluding interest charges, and for that, it is an equivalent objective, it amounts to finally stabilizing our public spending in volume after taking inflation into account. So I am not advocating wild austerity where we would seek to globally reduce the level of our public spending. However, let's be clear, we have not so far succeeded in stabilizing this public spending in volume. In past years, they grew by at least 1% per year. So if I look at the most recent period, I believe there is a very real effort on the state budget, and there, there is a reduction in public spending in volume, but state spending represents only 36% of the total. On the rest, that is to say local and social spending, which therefore make up nearly two-thirds, we are still at a 2% increase in volume. So I'm not saying everyone must be aligned on zero volume. I believe the state must be exemplary and make more effort. But can we aim for a slowdown in the growth of social spending and local spending? I believe that is what, when I speak of a general mobilization, that is also what would be part of a collective strategy. On sanctions against Russia, I admit not being a specialist and we are in no way decision-makers. What I would just like to say on this matter is first, there can be a form of political, even moral necessity. I will take an example that is public domain. When war was declared on February 24, 2022, Russia had significant foreign exchange reserves in the Western financial system, including the French financial system. I believe the freeze decided at that time corresponded to a requirement, it was compatible with international law, whereas seizure would not have been, but this freeze corresponded to an obvious ethical requirement. On the effects on the Russian economy of this sanctions package, perhaps I can say with great caution two things. The first is that it is true that the Russian economy continued to grow, probably more than expected, and I believe that is the point of your question. But it is clearly a war economy. It is an economy that functions. It was before essentially an oil economy. Oil has not disappeared. We know how sensitive the Russian economy is to the price of oil. But alongside this oil engine, a defense engine has been added, which relies very heavily on budgetary transfers, public financing, and therefore on inflationary pressures. And when we see today the symptoms on the Russian economy, which are the symptoms of a war economy, it is that growth holds but inflation has risen a lot. As a result, interest rates have risen a lot. This is one of the population's dissatisfactions, and it seems, though I am not enough of a statistics specialist, there is a trade-off between private growth and public growth. If I may say, the public defense sector drives the Russian economy. Private consumption is the most suffering. The other consideration, and I will stop there because that one looks to the future, is that there is still a fairly general feeling that the halt in technology transfers, which was an important part of the sanctions, may threaten the potential growth of the Russian economy in the long run, because there are a number of elements essential to innovation that are arriving less, but that is more prospective.
Thank you very much. The next speaker is Madame Dominique Voynet for the Ecologist and Social group.
Thank you, Monsieur le président. Go ahead. Thank you, Monsieur le président, Monsieur le gouverneur, ladies and gentlemen. You have described a worrying global economic context. The trade war launched by Trump has sown concern over trade and investments. The brutality is at fault, but also the unpredictability of American methods. And in economics, as you recalled, instability is the worst enemy. Just two days ago, Trump announced, against all expectations, a truce in the trade war with China for 90 days, more or less if he changes his mind. Who can say and how to project? In your 2025 letter to the President, you call for overcoming the tetany in the face of the United States, you invite a general mobilization, but I don't know too well what the estimates made a few months ago on the consequences of the commercial conflict are worth today. Are we going to start again as before? Are we going to continue the work engaged for European sovereignty and a strengthened multilateralism? I think we will all agree on the second option and to insist on the fact that we will not neglect at least the great actors of the South. I insist on this question because the concentration of USAID on countries and themes that suit American interests, as the American president imagines them, deprives developed countries of access to water, food security, and care. There will need to be a coordinated response from all the countries concerned. With this objective in mind, you propose fairly conventional paths, in the end. Control of public accounts. You accuse the social state and local authorities of drift without touching on tax breaks and investment choices in the energy field, for example, which undermine the restoration of budgetary balance. Work more and longer. We have never worked so much, you write. Perhaps. But what work are we talking about? In a country whose industry emigrates or dies despite the posturing? What work? What profession? The list of bullshit jobs is long and of tools that allow dispensing with human beings. Invest in artificial intelligence, but under what conditions? What do we gain from a massive exfiltration of our data and the training of artificial intelligences by men and women whose place they will take? Artificial intelligence is like the language of the ops, it is the best and the worst of things simultaneously. You add the necessity of financing rearmament in a national and European framework and not neglecting research. We will agree on that. Yet everything that makes, and will make, our collective security and our economic sovereignty is missing. This is the case for the relocation or preservation of vital industries in the pharmaceutical, chemical, and metallurgy sectors, while record layoffs are announced at ArcelorMittal. It is also the case for investment in the energy transition. You tell us that coal and steel are no longer really current. If energy and raw materials are current, how can we not understand that they are precious instruments of our sovereignty? I am arriving at the end, Monsieur le président. I would like to add here the concern for food sovereignty at a time when farmers can no longer live from their work, where extreme climatic events are multiplying, where glaciers are melting at great speed, we need diversified agriculture that feeds the men and women of this continent. Last question, perhaps, I risk it even if I fear knowing the answer. Must we give up on tax harmonization in Europe? Thank you for these analyses and all these questions. Monsieur le gouverneur, it's to you.
So, Madame député, you evoked many things. I agree with most of them, which may surprise you, but I will clarify on what you may have identified as disagreements or conventional paths. No, but thank you very much for having read it. Don't expect a central bank governor to always be extra-conventional, but I have a certain number of convictions that I will share. First, I totally agree with you, and I believe it is very important to say that we are facing two shocks from the United States. There is the protectionist brutality, and I believe the first to be penalized will be the Americans themselves. It is a tax on American consumers, let's be clear, perhaps for the benefit of a few large companies, but there is also a shock of unpredictability. And I was very struck—I was in the United States 15 days ago, I met a number of economic leaders—by the fact that...
It is undoubtedly this shock that most affects investment and growth in the United States. I obviously wish, as you do, and I think we all wish, that we do not simply go back to how things were before. I think that is, moreover, impossible. I will put it another way: if it is like before, it is not starting again, it is stagnating or even going backwards. And so, this awakening of Europe, and I believe our imperative, and also our agreement not to neglect the major players in the South—you may have read at the end of the letter I sketch out a certain number of coalitions of the willing that I believe Europe could lead. In any case, I have felt very strongly this expectation of Europe. It can be on the subject of climate, which I will come back to. I believe it must be on the subject of development, which covers both public aid and private investment flows. It can be on the subject of taxation. We haven't talked much about it, but unfortunately, it is a subject of regression in recent months. We had OECD agreements on the taxation of large companies that are not being implemented. It can finally be on the subject of financial stability and a certain number of rules. I won't speak here about Basel III. We fortunately had a meeting on Monday in Basel where the new American authorities reaffirmed their commitment to transpose the Basel rules. But there, we will judge the tree by its fruits. So there are many subjects where European convictions, if they are not shared by the new American administration, can be shared by many others.
Now, regarding what you said about restoring public finances, I will perhaps not go back over my past statements. Just a very small reminder, because it so happens that last September, before the Finance Committee, I had the opportunity to say that we should not exclude the taboo of certain tax increases, which earned me great popularity on some benches, and a little less on others. No, but I allow myself to remind you. There. And it's not to please some benches rather than others. It is, I believe, that we must look. No, but let's look objectively. I deeply believe in the European social model. I have said it very often, and I have been saying it forever. Our problem is that we have, with the same social model, a level of public spending significantly higher—9 percentage points of GDP more than our neighbors. So asking the question of spending efficiency does not seem to me to be an ideological demand; it is a pragmatic demand. But there are certain cases where we must not exclude tax increases. When you look at my previous remarks, it has been a good while since I said that we no longer had the means for unfunded tax cuts. Well, it's not necessarily the central topic of the day, but since you brought it up, I wanted to say it. I agree that AI can be the best and the worst of things, and we must regulate it. I would like to end on climate. I did not speak about it in my introductory remarks, but there, I risk being believed that it is an extremely strong commitment of the Bank of France and the European Central Bank. It so happens that we took an initiative at the Bank of France. This is an example of a coalition of the willing. I will insist on this, I believe it is very important in the international framework. We took the initiative during Trump 1, in December 2017, to create a network—it has an English acronym, sorry, NGFS, the Network for Greening the Financial System. We started with 8 central banks, a majority of which were European. We are today 140 around the table, and the global secretariat of this network is in Paris. And that is one of the reasons, not the only one, why the central bank, for the third time in a row, the Bank of France has been recognized by NGOs as the greenest central bank in the G20. Allow me just this little pride. We are very attached to it. It is not only central banks that can solve climate change, but we do it through our supervisory activity because we have imposed things on banks and insurance companies. We do it through this international NGFS, and we also do it in the case of the European Central Bank because we are pioneers in greening monetary policy. And that is also part of the regrets regarding the American shift today: denying the reality of climate change is not seeing the evidence, namely the multiplication, alas, of extreme physical events, their economic cost, and the increasing difficulty of insurance, the problem of insurability. So I hope a lot, and this is part of the difficult transatlantic discussions today, that we can at least recognize a certain number of physical and economic realities that call for financial prevention action in this area.
Thank you very much. We now have the intervention for the National Rally of Ms. Sylvie Joseran, and then Arnaud Legal will speak. Madam Deputy, it's to you. Go ahead.
Thank you, Mr. President. Mr. Governor, thank you first for your presence here. Mr. Governor, France's debt amounts to 3,300 billion euros, or 113% of GDP. You recalled it: in comparison, Germany's debt represents 62% of GDP. Twenty years ago, France was at parity with Germany in terms of public debt, which represented between 50 and 60%. When the volume of debt grows, the cost of servicing it increases. From 40 billion twenty years ago, the interest on the debt in France is today around double, 80 billion. Moreover, the debt is held by more than 53% by foreign investors. The interest paid is therefore a pure loss since it goes into the pockets of the lenders. To pay the interest, France borrows. The more we borrow to pay the interest on past debt, the more current and future debt increases, so that the debt becomes an intergenerational problem. Added to this bleak picture is deindustrialization. France has lost a third of its manufacturing industry in 20 years. In his book—though it is not yours—'Is the French Decline Reversible?', Jacques de Larosière, former governor of the Bank of France, notes that industry now contributes only 10% to the formation of our GDP. 'We are sinking into industrial underdevelopment,' he writes. In this context, should we not demystify this union of savings and investment because of the risks it presents, and notably the sovereign risk? If French savings are invested in European assets instead of remaining at 1 or 2% on passbooks, what will become of the French debt, already held by more than half by non-residents? Who will finance the Treasury bonds while French savings, poorly remunerated, has the advantage of financing the State at a lower cost, which is not negligible in an indebted state? Furthermore, how can we direct savings towards production when there is no longer any production or more concrete European projects to finance that would allow capturing household savings? The digital revolution, presented as a European project, is entirely in American hands. It is not by regulating capital markets that the desire to produce and invest will be born, which is not conceivable without a climate conducive to risk-taking, such as cheap energy or stable taxation. Is the existence of projects not a prerequisite rather than a consequence of the Capital Markets Union? Finally, Mr. President, grant me 10 seconds. For an effective capital market, capitalists must exist. The French saver is risk-averse but, on the other hand, has a sense of remuneration. However, key interest rates are lower than American rates. Given this gap between interest rates, how would investment be stronger thanks to the Savings and Investment Union? I thank you.
Thank you for this series of questions. Mr. Governor, it's to you. More in your domain now, we are really in the domain, yes, yes, yes.
First, Deputy, I agree with all the figures you cited at the beginning, and I believe we all agree on the assessment, which also ties into your question about public finances. The question is indeed how we get out of it. And I also agree that it creates an intergenerational problem that is not often highlighted enough. Whenever I speak to audiences of young people or students, which happens quite often, I tell them that it is their problem as much as the climate debt. However, the sensitivity is not quite the same in general. How do we get out of it? No, I don't want to go back to the tax versus spending debate, but I note that there is obviously much less consensus on solutions than on spending cuts, but that is the whole difficulty of parliamentary and political debate. There is a general agreement in principle, but there too, pardon the mot juste, I have come across a form of 'chamboule-tout'—meaning as soon as there is a savings proposal on the table, there are a whole series of forces from everywhere explaining that it's not the right one. So savings are always for others and never for oneself. There. But I am not saying it is easy, but we absolutely must arrive at a form of shared diagnosis and, I believe above all, a shared effort, and the more shared it is, the fairer it will be and the less heavy it will be for each person. Now, I will focus on what you said about the union for savings and investment and the risks it would present in this context. Now, I will be more optimistic or confident than you here, but allow me to explain why. Well, first, on the remuneration of popular savings in France, a very important subject that has just been the subject of a parliamentary report, I believe, published today. I remind you because the Bank of France plays a fairly central role here that the passbook savings account is today remunerated at 2.4% and the popular savings account, which is open in principle to 19 million French people, is remunerated at 3.5%. So these are remunerations that, compared to the concern you expressed at the end, are, I believe, quite appreciable given an inflation rate in France that, with the latest figure, is at 0.8%. Well, it may rise a little, but we are expecting an inflation forecast between 1 and 1.5% this year. I would like to take this opportunity—Mr. President, will you allow me 30 seconds to really step completely outside the scope of the Foreign Affairs Committee, but to say it before the deputies of my country—to make a vibrant plea in favor of the popular savings account. I believe this product is not well known enough. I said it is open to 19 million French people, but only 12 million French people have one today. I think there are a certain number of millions of our fellow citizens who are entitled to the LEP and who have their savings on the passbook. When we have the figures I recalled, I believe there is a real priority. Is the financing of the French economy—that is the question you are asking—of French companies at risk once we put it in a European framework? You asked the question about debt, you also asked the question about our industrial companies. I do not believe so, and I even believe the opposite. So if I can just share my conviction in this regard. First, it so happens that France, given the state of its public debt, is part of—while there is a savings surplus at the European level as a whole, there is no savings surplus at the French level in particular. There is even a deficit that corresponds to the deficit of our current account. So today, being able to call on the savings of other countries, and notably European ones, allows us to finance a certain number of the needs of the French economy, public or private. I believe that what is key in this matter is two things. The first is that when we call on external savings, and you spoke of non-residents, it seems to me that there is much greater security in doing so from European savings than from extra-European savings. We share the same currency, we share the same rules, I believe we share the same rule of law, and we see especially today the advantage that represents. It does not seem to me that there is more risk today in being financed by Europeans than in a strictly French framework. But the other thing on which I will—and I believe once again that France is rather a winner of this mutualization of savings because the savings surplus is rather in other countries and the investment needs are here with us. But the other thing that seems essential to me, which can join what you say about the existence of projects, is that today not only is this savings not going enough overall towards Europe—I cited the 400 billion that go towards extra-European projects. That is a poor geographical allocation, if I may say, but there is also a poor allocation in terms of instruments. What do I mean? There, I made a too rapid allusion in my initial text, which is that today the very great financing deficit in France and Europe is equity capital and venture capital. Now, I will cite a figure that is very little known, but if I look at the equity capital of French and European companies relative to the size of our economy, of GDP, we are around 90% for France as for Europe. If I look at the same figure in the United States, it is the equity capital of American companies relative to American GDP, we are at 215%, more than twice as much. If I look at the inverse, debt financing is proportionally twice as high in France and Europe as in the United States. What I just said is of great importance because if an entrepreneur is financed by equity, he is much more willing to take risks. The repayment of debt is a constraint at a fixed date, at a fixed amount. And symmetrically, if an investor invests in equity or venture capital, he is much more willing to accept risks. Why? If he loses, yes, he loses his stake, but if he wins because the innovation succeeded, he benefits from all the added value associated with the innovation. However, if you are a debt investor, you have no hope of receiving more than your debt and therefore you have no tolerance for the loss of your debt. I hope I was clear. This point is not very often highlighted, but I believe it is absolutely central. Our deficit in equity and venture capital is one of the explanations for our investment deficit. Now, you are right, we need projects. I am very pleased with you that there are industrial projects. Have we reached stability on this? The nuance I allow myself to introduce is that productive potential is not only industry, and France has service companies that provide extremely appreciated contributions to our fellow citizens and are recognized on the international stage. I could have cited that among the strengths of the French economy. We have as many large international companies as in Germany, even though our economy is not the same size. And I believe we are strong in the service sector. That should not condemn us to being weak in the industrial sector, but that a significant part of our wealth is linked to services does not seem regrettable to me.
Thank you very much. The floor now to Mr. Arnaud Legal for La France Insoumise.
Thank you, Mr. President. Mr. Governor, you mentioned in your introductory intervention a very important aspect of the current international situation, which is the trend towards de-dollarization of trade and the economy. Now, it will be a very long-term process, but it is a process that has begun, which is linked in part to the massive use of sanctions by the United States, which leads many countries to want to trade in other currencies, which is linked in part to the relative disconnection between the volume of dollar issuance and the actual production of wealth in the United States. All of this being accelerated by the somewhat erratic, though coherent by the way, policy of Donald Trump. Now, at present, the dollar remains an important reserve currency, the first in the world, but the process has begun, and you therefore advocate for an international role for the euro, focusing, I believe, on an increase in scale and a unification of the European capital markets. I would like to say perhaps beware of illusions, because the expansion of the market was not the only strength of the dollar. The dollar relied on political and geopolitical unity, and it also relies on a great flexibility of monetary policy, things that do not exist, until proven otherwise, in Europe. In Europe, we have a dogma, which has been a bit dented but is still a monetarist dogma, of an ordoliberal tendency, which refuses to see in money a political tool, a political weapon, and which sees in money only a reflection of the economy. That is a first weakness. Second weakness, there is a system of internal economic competition that is not the same as in the United States. And that can explain, for example, that while the crisis came from the United States in 2008-2009, in the end, we had a euro crisis and not a dollar crisis. You tell me if I'm wrong, but that's how I understood it. So, one, do you see a serious questioning of these dogmas that would mean your solution of expanding the capital market would make the euro mechanically a currency truly competitive with the dollar? For our part, we rather advocate for a common currency, which should have been done at Bretton Woods, but well, we're not going to redo history and no one here is responsible for that, and the task is immense. Secondly, you spoke of the digital euro, okay? The last time we talked about this subject here, it was with the former director of the ACPR, and I had asked him about the fact that Amazon was used as the company chosen for the test phase of the digital euro payment solutions. He told me it's a scandal, it's a sovereignty problem. Since then, I haven't had an answer on where we are in this matter. And finally, three, you advocated for massive investments in AI, comparing this to the period of coal and steel. With whom? If it's to do it with Microsoft or with Emiratis who collaborate with the Stargate projects in the United States, I'm not sure we'll gain sovereignty, and above all, the heart of the matter is digital data and not artificial intelligence as such. It's the storage of data, with whom, for what purpose, and not just doing AI for AI's sake, because that will only mechanically bring us back into the fold of American oligopolies. Excuse me for having exceeded a little. I thank you for these questions, Mr. Governor.
