The Economist

40 Europe The EconomistJuly 21st 2018

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ESS than two years ago Bruno Le Maire

was an outsider in the race for France’s

centre-right Republican presidential nomi-

nation. Little over a year ago he de-

nounced another presidential candidate

Emmanuel Macron as a “man without a

project because he is a man without con-

viction”. Today the “man without convic-

tion” occupies the presidency and Mr Le

Maire (who quit his own party) serves as

his finance minister. Astonishingly all this

is regarded in France as perfectly normal.

If Mr Macron’s hybrid government

which has borrowed from the former left

right and centre is ever a source of frustra-

tion for the self-described Gaullist Mr Le

Maire will not say so. “We are doing exact-

ly what we need to do to be successful in

the social and economic transformation of

the French model” he insists. In just over a

year the government has cut corporate tax

ended the wealth tax and introduced a flat

tax on investment income. The budget def-

icit has been brought down to below 3% of

GDP. Employment rules have been altered

to give more flexibility to employers. Mr Le

Maire is now piloting through parliament a

bill known as PACTE designed to cut red

tape and help small companies invest

grow and create jobs.

Sticking loyally to Mr Macron’s script

Mr Le Maire eschews the word “reform” in

favour of the more epic term “transforma-

tion”: of mindsets of economic culture of

the French social model altogether. This is

no Thatcherite project however. Mr Mac-

ron promised during the campaign to re-

duce public spending from over 56% of

GDP only to 52% by 2022—which would

still leave it well above the euro-zone aver-

age. A graduate like MrMacron of theelite

civil-service training college the Ecole Na-

tionale d’Administration Mr Le Maire is

unapologetic. “I don’t believe that cutting

too far or too quickly is the right way” he

says. “We don’t want to break with French

history.” Given his background it is fair to

guess that he would prefer to shrink the

state faster. But he will notadmit to that.

Indeed curbing public spending the

feeblest element in Mr Macron’s record so

far is already becoming the subject of furi-

ous resistance. A wide-ranging public-

spending review known as CAP 22 has

produced such controversial ideas that

though the report has been leaked it has

not yet been published. Mr Le Maire says

he is “determined to reduce public spend-

ing” but refers to it merely as “advice” and

declines to say when or whether it will be

published. All ministers have been or-

dered to contribute an effort. Decisions

will now be dribbledoutover thesummer.

The point Mr Le Maire stresses is to im-

prove French competitiveness while main-

taining a strong guiding state which has

helped make France one of the few Euro-

pean countries in which inequality has not

increased. In a nod to the left his draft law

for instance cuts tax on employee share-

ownership schemes to encourage firms to

spread profits more widely. Yet to cries of

protest on the left he has also nearly

halved the numberof subsidised jobs pre-

ferring to encourage private firms to create

jobs themselves. France’s employment

rate at 65.7% in the first quarter is now at its

highest level since the 1980s.

Mr Le Maire will tell anybody willing to

listen that “France is back”. The mood

even before the country’s World Cup vic-

tory on July 15th has lifted over the past

year. Stable policymaking has helped re-

store French credibility. Less clear though

is whether Germany is ready to deal with

renewed Gallic assertiveness. The French

had hoped that last month’s European

summit would seal an agreement on re-

forming the euro zone notably with a deal

on a common budget. But migration

eclipsed almost all else; such ambitions

must now wait until Decemberat least.

Mr Le Maire says he is undeterred by

what to many observers looks like a da-

maging rebuff. He calls “historic” the Fran-

co-German deal reached in Meseberg

shortly before the summit which for the

first time agreed to the principle of a euro-

zone budget. A fluent German-speaker Mr

Le Maire has already held some 35 hours of

meetings with Olaf Scholz his German

counterpart twice working through the

night until dawn.

“We won’t impose anything on any-

body” insists Mr Le Maire mindful of

smaller countries’ reticence. Experience

shows he claims that “in the end a

Franco-German agreement remains the

only basis for consensus among member

states”. But Franco-German agreement is a

necessary rather than a sufficient condi-

tion. Besides Germany with a weakened

chancellor is in no hurry to act on the ob-

jectives it agreed to. Mr Le Maire may have

a long wait ahead of him. 7

An interview with Bruno Le Maire

The adaptable Gaullist

PARIS

A fine balancing act for the French finance ministerwhoswitched partiesto work

with Emmanuel Macron

Le Maire the transformer

Islam which began in the late 1970s re-

sumed in the 2010s after Mr Erdogan

ditched his liberal allies broke off peace

talks with the PKKand went to war with

the Gulen community a powerful sect. An

attempted coup in 2016 which the Gule-

nists spearheaded helped consummate

the relationship.

Especially today under a new constitu-

tion that places the entire executive in Mr

Erdogan’s hands the MHP prizes its power

in the bureaucracy much more than any

cabinetseats says Kemal Can an expert on

Turkey’s right. The nationalists will proba-

bly shy away from taking an active role in

economic and foreign policy says Mr Can

but they will make sure Mr Erdogan contin-

ues to tend to domestic affairs with an iron

fist. Although the governemt ended the

state of emergency this week tough new

laws will take its place. In his letter from

prison MrCakici boasted aboutthe power

his men wield within the police and the

army. “You do not own the state” he wrote

addressing Mr Erdogan. “The ulkuculer are

the state’s foundation.” 7 老吉发布