Ending Ennui

In France, Ex-Banker Tapped to Kickstart Economy

emmanuel macron. Source AFP
France's new Economy Minister Emmanuel Macron is being described as the "anti-Montebourg."
  • Why it matters

    Why it matters

    The appointment of Emmanuel Macron as economics minister signals a willingness to address France’s economic problems with a pro-business approach.

  • Facts

    Facts

    • In 2007, Mr. Macron worked on a commission that promoted economic growth.
    • President François Hollande wants to cut €30 billion ($39 billion) in taxes on businesses.
    • France’s national debt soon is expected to reach €2 trillion ($2.6 trillion).
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    Audio

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Emmanuel Macron, just 36 years old, is a fresh surprise in French government as the new minister of economy. The dark-haired politician and former investment banker, who might come across as bland and intellectual, replaces Arnaud Montebourg, who had the reputation of being a stormy troublemaker.

With the appointment, Prime Minister Manuel Valls is distancing himself from the left wing of the Socialist Party. Three of its members are out of the new government – and Mr. Macron is a symbol of President François Hollande’s determination to move forward with economic reform.

Mr. Macron’s appointment is a clever move. The new minister attended the École Nationale d’Administration, an elite graduate school that grooms government officials.

Already described in French media as the “anti-Montebourg,” Mr. Macron doesn’t stand for government intervention in business but for a liberal approach. The son of a physician, he describes himself as a realist, advocates austerity, and is friendly to business. This should calm the markets. “He fits into the approach we have set,” said Mr. Valls.

Mr. Macron worked for Rothschild Bank before joining Mr. Hollande’s team in 2012 as an advisor for economic policy and deputy secretary-general in Élysée Palace, the president’s office. Mr. Hollande raves about him being “very gifted and very quick.”

Mr. Macron would have liked to have been named finance minister in April instead of Michel Sapin, but Mr. Hollande passed over him because he wasn’t an elected member of parliament.

The response in France to Emmanuel Macron's appointment is mixed.

In June, Mr. Macron stepped down as an advisor, citing a personal project he was working on. Before that he was considered Mr. Hollande’s star consultant and partly responsible for his austerity and reform course, including the so-called ”responsibility pact” that cut taxes on business.

Insiders said Mr. Macron can reason with Mr. Hollande on economic matters. Former conservative president Nicolas Sarkozy also wanted Mr. Macron on his team as an advisor, but the man he was wooing is a committed socialist.

The response in France to the appointment has been mixed.

Finance Minister Sapin said Mr. Macron will be “a good economy minister” and represents a change in generation and style. Pierre Gattaz, president of Mouvement des entreprises de France, the country’s largest union of employers, was also happy.

He said Mr. Macron knows markets, and his appointment shows government will focus on a social-liberal approach in the future. The newspapers Le Monde and Le Point had similar views.

Mr. Macron’s mentor, Jacques Attali, a one-time advisor to François Mitterrand, posted his enthusiastic approval on Twitter: “Emmanuel Macron is very professional, a great future politician, a man of culture. The ministry of economy is in good hands.”

In 2007, Mr. Macron helped compile a report by Mr. Attali’s Commission for the Liberation of French Economic Growth.

On political fronts, the choice of Mr. Macron was criticized on all sides – from left-wing Socialists to the conservative opposition UMP party to the Front National. Mr. Macron, they said, is a “bad sign for the Left.”

 

Hollande and Macron. Source Reuters
Emmanuel Macron has President François Hollande’s ear. Source: Reuters

 

Even with an “anti-Montebourg,” the speed of reform is not likely to increase much in France. But at least no one in the new crew of ministers, including Mr. Macron, will throw stones in the way.

The outgoing economy minister constantly banged the table for economic patriotism and government intervention. Mr. Macron, on the other hand, is right in line with Mr. Hollande. Reforms should aim to strengthen France’s lagging economy.

The president cautiously is steering toward needed changes and occasionally backpedaling in a country averse to reform. His policy includes cuts in public spending and concessions to businesses.

But the €50 billion ($65 billion) that he wants to save is tiny in comparison to the huge French national debt, which soon is expected to reach €2 trillion ($2.6 trillion).

But at least Mr. Hollande is putting reforms in place.

Instead of relying on spending, he has declared that increasing competitiveness is the way to bolster the economy. To that end, he announced €30 billion ($39 billion) in tax cuts to businesses – a move that until now was scorned.

Even his conservative predecessor, Mr. Sarkozy, shied from such measures.

In matters of business, it’s a sign that France’s new minister of economy is weighing in on the side of competition.

This article was translated by David Andersen. Greg Ring also contributed. To contact the author: kuchenbecker@handelsblatt.com

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