00:00And for more, let's go now to Lancaster in northern England.
00:04Renaud Foucault is a senior lecturer in economics at Lancaster University's School of Management.
00:11Thank you for being with us here on France 24.
00:14Good evening.
00:15So here we have it.
00:19It's pretty much going to script at this point.
00:21The French prime minister, who did succeed in one respect, in that ever since he made that shock announcement last month of this special session of parliament and a vote of confidence that he's perhaps sure to lose, it has forced a conversation on the budget.
00:44Is it the right conversation to be having, France's ballooning deficit?
00:47I think Bayrou is definitely someone who has a sense of dramatization.
00:54And so I think, to be clear, contrary to what Bayrou has said at some point, the IMF is not going to come to France tomorrow.
01:02But it is true that France has a deficit problem.
01:06And that this is a bit like the proverbial boiling frog.
01:09Like France, at the moment, they have 6% GDP deficit roughly, but they still pay interest rates that are based on the past.
01:17So the time when we had low interest, and also the debt over GDP didn't explode like crazy, also because it was eaten by inflation.
01:24So as of today, France is in a bad position.
01:28It's not terrible.
01:29The problem is what comes next.
01:31If France does not reduce deficits, every single new billion of debt issued by France will be issued at a price that is higher.
01:39So the interest rate that France will pay on the next generation of debt to be rolled out is going to be more and more important.
01:45And so where Bayrou has made the right to...
01:48Renaud Foucault, I'm going to interrupt you for a second.
01:51We're going to cross over to the National Assembly and listen to the French Prime Minister.
01:54The messages that we are receiving constantly, these are messages from people who are sending through some quite violent comments, but that is the life of a politician.
02:22So if today, through our own behaviour, try and move beyond this image that people have, one of violence and mistrust, then we would be doing service to the democracy that we are here to defend.
02:45And that is my first comment.
02:52My second comment, if you would allow me to, I forgot to mention members of the government who were here, but each and every one of them have spent nine months with me.
03:08And for me, as Prime Minister, I spent nine months of quite immense joy working by your side, because despite all prognostics, we formed a team with some heavyweights amongst our reigns.
03:27We worked together, and we worked together, and there was not a single crisis, there was not a single moment of tension in the past five, nine months together.
03:43And when you look at the diversity of political sensitivities that were part of the government, it was no easy task, but we managed to work together.
03:57I believe that we showed a Republican front with honour and with drive.
04:19Thirdly, there were no questions asked today.
04:27Is the country's current situation one that calls for further division, further procrastination,
04:39or is the country's current situation one where we need to take stock of the situation
04:47and fully recognise what that situation is?
04:52The true future of our country will come through in the coming weeks, not today.
05:04Because things are not turning right and not panning out, as people would expect, but we need
05:14to have a clear mind, to have a clear mind, and the politicians, all of us, need to have a true understanding
05:25of what we are doing to act unitedly.
05:32And I would sincerely hope that we can defend a vision that a country cannot give up its independence,
05:42be it from a military or a financial point of view, we cannot stand by as we are subject
05:48to dominant powers, as we are subject to our debt holders.
05:55We have to stand here, and we have to defend a vision, as we have done for the past nine months.
06:02This is a moment of truth, and this moment of truth, a vote, will not efface that from the reality
06:17that we are currently living in.
06:19I am very happy that we have been able to spend this time together to talk about the fact
06:25that this is a moment of truth.
06:27For us, it was a moment of truth.
06:33This moment of truth will not end up.
06:35A vote will not end up with reality, and it is what we have tried to, together, to rebuild.
06:43It is very important for the future, and I am happy that we have been able to share this moment.
06:50Thank you very much, Mr. Prime Minister.
06:52My dear colleagues, the Prime Minister has engaged the responsibility of the government.
06:58I will put in the way the approval of his statement of general policy.
07:01The vote will be happening in the parking lot of the meeting.
07:04The vote will be placed in your vote.
07:07The vote will be announced in the seat of the National Assembly.
07:10It is open for 30 minutes.
07:13It will be closed at 18h50.
07:15The session is suspended.
07:17The speaker of parliament there announcing that after all the speeches have concluded,
07:24the parliament will now vote the confidence or not.
07:28It's a straight-up-and-down vote for Francois Bayrou's government.
07:32You heard Francois Bayrou there speaking for the second time to lawmakers, this time from
07:38the floor of the National Assembly in what sounded more than his earlier speech from the rostrum
07:44as a goodbye speech, thanking members of his government, calling it a moment of truth.
07:49The result of the vote, of this vote of confidence, whereas, again, they just need a simple majority
07:56for one side or the other, will come in exactly 30 minutes' time.
08:01We are in the company of Renaud Fougard, senior lecturer in economics at Lancaster University.
08:07And we heard the prime minister.
08:12Your reaction to that pitch he made about this being a moment of truth kind of harks back
08:16to what you were saying earlier about being frogs in a pot of warming water,
08:24the way he described the budget predicament of France.
08:27Yeah.
08:28And I think also he said something that is quite important, which is transparency and
08:33being a moment where people can finally have a conversation.
08:36If there is one thing I see that Bayrou brought to the table that nobody did before him is the
08:41big elephant in the room, which is intergenerational fairness in France.
08:45The fact that there has been a bit more transparency on the budget and we understand now how big
08:50the pension problem is in France, the fact that, for instance, the education budget,
08:55a part of it is stolen directly to pay for the pension of the general civil service,
09:00the fact that it's actually the one, the big welfare spending in France,
09:04and that there will be no future, no discussion about the future sustainability of France,
09:09without talking as in the terms of Bayrou, the fact that we have sacrificed to a certain extent
09:15current comfort on the comfort of boomers. And this is something that nobody told before him
09:21and something that he was able to say, I think, because it's a farewell tour and he's not expecting
09:26to stay in post. And I guess his chances of coming back are relatively low.
09:30But this is the moment France is right now, and I think people cannot ignore this anymore.
09:34Yeah. He was in an interview with broadcaster TF1 in their flagship 8 o'clock news program
09:41where he talked about sacrificing future generations, quote, for the comfort of boomers.
09:47And from the left and the right, they came down on him like a ton of bricks.
09:53Question is, this idea of, for instance, one of the ideas that was floated was to, for instance,
10:00no longer index pensions on inflation as much as before. Is that fair?
10:06Yes. So it is clearly fair in the sense that the current generation of people who are retired,
10:13they didn't pay as much as they get. So some people would say they respected the rules,
10:18but they also wrote the rules themselves. And the rules were also written based on the different demographic reality.
10:24So by choosing not to have as many children as their parents, boomers also somehow chose that the models would not be sustainable with the current replacement rate.
10:33And if you compare to countries like the UK where I live, you don't have a low state pension in France.
10:39You have people who receive state welfare benefits from the state that would be 3,000, 4,000 euros a month.
10:46We're talking sometime about people who own their house, who may own a second house and still receive 4,000 euros a month from the state.
10:54This is simply clearly unfair. And I think it's quite crazy. We had a lot of conversation about intergenerational fairness in the context of the environment,
11:03where I think people sort of got the message that there was a problem.
11:07But when it's about pension in France, it's not only that you have elderly people voting more, which is the truth, but you also have young people in the street to defend.
11:16At the same time, if you defend those very high pension, you are also saying we are cutting spending in education.
11:23We are cutting all other possible sources of investment simply because we want to sustain those promises made by a generation to themselves.
11:32And that will never apply to the future.
11:35So when people are fighting for the current pensions in France, when people who are 25, 30 years old, this will never apply to them.
11:43The demography is not the same. And their pension anyway will be somehow linked to capital markets and not only to the next generation.
11:51That conversation about the boomers who took power and never relinquished it.
11:56Is it something you think will continue in the next election cycle in France?
12:01At some point, I think that there was a problem with the way the French constitution work, which is that Emmanuel Macron,
12:08and you know Emmanuel Macron being Jupiter above all the parties, et cetera, he took on himself to nominate prime minister.
12:15And that's kind of his role. But he never had like those public discussion about building coalitions with others.
12:21So I remember, I mean, you will remember that after the last election, the last snap election, there was actually a very one clear message from the electorate is that they voted for a Republican front.
12:32They voted for the left and the center in second rounds against the far right.
12:37So if there was one message in this fragmented parliament, it was we want the others, those who are not the far right, to take the responsibility.
12:46At this point, they should, they could have been a conversation about how can we agree to build a better future and bring back deficit to a lower level.
12:55This didn't happen because of the left, because of the center, because of a lot of different things.
13:00But this didn't happen. And this must happen in the future.
13:04The conversation you're saying must happen, at this point in time, we heard in that speech from Francois Bayrou, you talked about intergenerational fairness.
13:16There's a question about income inequality. And we heard in his speech at one time, one point, he bristled against those who'd like to put more taxes on the wealthy.
13:25He even gave a shout out to France's richest man, the luxury goods mogul Bernard Arnault. Is that the right approach?
13:34Definitely not. And it might be why Bayrou failed. Bayrou took the job because he was the guy willing to talk to the far right and to the left at the same point, which is, I think, a key element if you're a centrist.
13:46But the problem is what the left are asking for. I think people who are like, OK, economists like me, we tell you they're asking for those very high tax on capital.
13:55And it's true, it's not going to bring a lot of revenue. So somehow the left, OK, Bayrou is right, they are lying. It's not going to bring a lot of money.
14:02But at the same time, you cannot ignore the fact that in France, you have demand for that.
14:06People think in itself, from a purely fairness point of view, they want those tax rates to be higher.
14:12And so even if it doesn't bring revenue, you have to have this conversation because this is democracy. People want that.
14:18And so you need to tell to the left and the far left, guys, you cannot build a budget on the premises that it will bring half of the deficit.
14:26Many countries have tried that. It doesn't work. Capital move. Those people will put their money elsewhere.
14:31But at the same time, you need to tell to people like Bayrou or Macron, people want at least symbolic moves for fairness.
14:38And Macron, if you remember, one of his first move was to remove the tax on the highest capital.
14:44So the in France. So this is the kind of thing that I think somehow if you want to build a coalition between the center and the left must return in some form,
14:54some symbol to say we don't just spit on the face of people who want to tax the wealthiest more.
15:01Renaud Foucault, you touch on something essential, which is coalition building. Today they're having elections in Norway.
15:09The incumbent Labour prime minister is probably said, according to the polls, to have to make a coalition with four other parties.
15:16And that's just normal. And that's normal everywhere.
15:19It's normal in places like neighboring Belgium, where sometimes they wait nearly 600 days to form a government.
15:25But are the French going to learn from this experience and be a little bit more like the rest of Europe?
15:31They should, because that's what they asked for in the in the elections.
15:37So first of all, there were a lot of debates before the previous snap election about, oh, the current majority system in France doesn't work.
15:44We want proportional representation. Marine Le Pen was asking for that.
15:48Francois Bayrou was asking for that. The left was asking for that.
15:51And what they got at the last snap election is a parliament that looks like a German parliament.
15:56One third block on the left, one third block on the center right and one third on the far right.
16:02What everybody will learn to do at this time is not to have red lines on everything.
16:07One year later, they're still not able to do that. And this is I blame all the political parties.
16:13I think I can hear some positive sound from the Social Democrats so far was saying, OK, if we are prime minister, we're willing to make an effort.
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