June 1, 2023

Geoffroy Roux de Bézieux: “The next reforms will have to be based on a different method”


After the adoption at 49.3 of the pension reform, are you relieved to see it ratified or worried about the political and social climate?

I am neither relieved nor worried. This is not a victory for employers. This reform is simply essential and painful – all the governments that have made it in the West have paid for it in the following elections. This reform had to be carried out, without denying its politically complex and anxiety-provoking nature for a majority of our fellow citizens. She was financially indispensable.

The only thing we can regret is that we were not able to collectively explain the current situation. All the criticisms made of the situation of women or long careers, for example, often reflect ignorance of the current system.

Do you fear a paralysis of the French economy with the hardening of the social situation?

The period at the beginning of the year was that of negotiations for wage increases, and I want to emphasize that it went rather well. Companies did their homework for the raises and tried to offset the effects of inflation as much as possible using all the tools (wages, value-sharing bonus, etc.) at their disposal. This translates into low conflictuality in the companies, whereas one might have feared that this was just one more focus.

The pension conflict exists, but this has not been transposed to the vast majority of private companies.

We are now talking about blockages in refineries…

If it came to that, we would ask the government to use the means at its disposal – in particular requisitions – because it is not justified to prevent the economy from functioning.

Is there a risk to French growth?

Economic history shows that social conflicts have little impact on activity. French growth is resisting, with a few exceptions. For example, new construction is in freefall and this is a real concern, for the sector as well as for citizens. The Banque de France has raised its forecasts and this is what we feel at the corporate level.

We are no longer in post-Covid euphoria, but when I see my European counterparts, I can see that France is resisting better.

How do you explain it?

The supply policy has strengthened the competitiveness of French companies and enables them to better tackle this slowdown in the global economy. We are affected like everyone else, but less than the others.

And public finances are also benefiting from the supply-side policy, with corporate tax revenues that are well above those of 2019 despite the drop in the tax rate. The State creates economic dynamism, and does not lose tax revenue.

Social democracy has some lessons to teach parliamentary democracy…

Was the “economic and financial risk” put forward by Emmanuel Macron to justify the adoption of the pension reform by 49.3 therefore exaggerated, given the situation you describe?

This risk is of another nature. France is massively indebted and must therefore reduce its deficit. We know that reducing public spending is a complicated task, so increasing the amount of work allowed by the pension reform is an additional way to tackle this problem. Even if this reform will yield less than expected, with moreover optimistic assumptions on employment.

How to get out of this political and social deadlock?

Emmanuel Macron said a few years ago about the social partners that when it was difficult, there was no one left. At the time, this was not entirely wrong. Since then, we have been able to forge ties collectively, including intuitu personae, and conclude agreements, even if not all of them have the same scope.

Against all expectations, unions and employers have reached an agreement on the sharing of value that I describe as historic by its content but also because it was concluded in the midst of a social conflict. It is essential that the government take inspiration from this method if the thread of reforms is to be renewed.

Is this method credible with Laurent Berger asking that the law on pensions not be enacted?

Laurent Berger indicates that it is the dialogue with the government which poses a problem, not the dialogue with employers. Beyond pensions, other challenges await the country. The social partners must play their part to move forward. This method takes time.

I would add that the contrast is striking between the ‘heckling’ in the Assembly and the calm and respect of the negotiations between the social partners. Social democracy has some lessons to teach parliamentary democracy…

Will the Medef propose to the unions to negotiate a new autonomous social agenda?

I remind you that some negotiations are in progress . In April, we will complete the one on the consequences of the Climate and Resilience Law in companies. Another relates to the Workmen’s Compensation and Occupational Diseases Fund. We are going to open one on the status of social protection groups. We will also have to negotiate on Agirc Arrco on the basis of new financial forecasts, and on the status of Housing Action since its debt has been classified as State debt by INSEE.

Beyond that, we are going to offer the unions a meeting quickly to complete the agenda. There are clearly questions about work, which have arisen with the pension reform. We are ready to discuss it.

Precisely ?

Let’s be operational: whoever kisses badly embraces too much. After four and a half years in office, I learned the lesson that high masses, where everyone comes with their posture, do not work. You need specific objects. This is somewhat the fault of the CNR at the national level. Before negotiating, you have to work and reach a shared diagnosis. It took us seven months to share the added value! It may seem long but the result is there.

What do you expect from the government, and from the full employment bill in particular?

As a priority, the agreement on value sharing must be transcribed to Parliament. For the full employment law, the recruitment difficulties that persist while the unemployment rate is still above 7% point to several problems: training, transport, housing, activation of the RSA, etc.

We must not make the mistake of announcing fifteen social projects. It is necessary to choose a few themes after having listened to the social partners to arrive at an operational law which brings the unemployment rate to almost 5%.

The next social reforms will have to rely on a different method

There are files on the table, but aren’t you afraid that overall, the major reforms of the five-year term are already over?

I do not wish it. It is a question of political will, but also of method. The next social reforms should be based on a different method and be further discussed and negotiated upstream with the social partners, aiming for very concrete, operational responses.

I am thinking, for example, of bringing together labor supply and demand in an employment area. After the reform of unemployment insurance and that of pensions, we can still consider that the two most difficult projects to carry out are behind us, and that they will bear fruit. Now, there are still many things to do to strengthen our productive fabric.

Some believe that a lot has already been done for companies and that we could have reversed the production tax cuts rather than saving on pensions…

That would be a major economic mistake. I repeat, the policy of supply works: nearly one and a half million jobs have been created, and without lowering tax revenues, on the contrary. I am counting on Bruno Le Maire and Emmanuel Macron to be the guarantors of this policy. Knowing that there is a huge investment challenge ahead of us to decarbonize the economy, and that the competition between Europe and the United States will be fierce.

How do you judge the first tracks of the bill for the green industry?

This project is obviously welcome, both in substance and in method. In particular, there is a question of additional depreciation measures, which would be a good tool. But for now, few concrete things are emerging.

Joe Biden is going much faster…

The response to the American plan must first be at European level, and I welcome the unlocking of State aid, which should allow a State to align itself with American subsidies for a given project. We have the feeling that mentalities are changing everywhere in Europe.

On the other hand, I believe that the account is not there on the reform of the electricity price market. In one way or another, the French economy must be able to reap the benefits of the competitiveness of the energy produced by nuclear power. The adjustments proposed by Brussels do not go far enough.

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