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14 May 2013

Louis Gal­lois speaks at the Fed­er­al Min­istry of Fi­nance: Eu­rope’s role in glob­al com­pe­ti­tion – a French point of view

The special “Federal Finance Ministry in Dialogue” series on promoting competitiveness was launched on 13 May. Parliamentary State Secretary Steffen Kampeter welcomed Louis Gallois, the French General Commissioner for Public Investment, as a guest speaker. Mr Gallois was the CEO of EADS until the end of May 2012 and had previously served as President of SNCF, France’s national railway company.

Louis Gallois presented his report on competitiveness to the French Government on 5 November 2012. In it, he demanded a radical cure for the French economy and called for a “competitiveness shock”.

Louis Gallois, the French General Commissioner for Public Investment (left), in a discussion with  Parliamentary State Secretary Steffen Kampeter (right)
Source:  Federal Ministry of Finance/Laurence Chaperon

Speaking at the Federal Finance Ministry, Mr Gallois said that it was a particularly good time to exchange French and German views on competitiveness in Europe: “Our duty is to preserve the treaty of friendship that our two countries concluded in 1963. It is the cornerstone of Europe”. He described uneven competitiveness as a threat for Europe, saying that Europe’s unity was linked to the convergence of European economies. 

Mr Gallois went on to talk about the 35 measures pursued by the French government in order to remove obstacles to competitiveness. They include a tax credit of 20bn for all companies, the creation of a public bank for innovation and investment focusing on SMEs, incentives to encourage cooperation between public research institutes and business, efforts to increase export credit to a level comparable to the best in Europe, and measures to promote apprenticeships and training. He referred to the historic labour market agreement of 11 January 2013 enhancing the flexibility of permanent contracts and providing greater security for employees on fixed-term contracts. He explained that François Hollande had announced a “simplification shock” to reduce the complexity of French regulations on topics ranging from town planning to the environment to food safety. 

Talking about cooperative policies in Europe, Mr Gallois said: “We must play a cooperative game at the European level to align our efforts for competitiveness and implement our programmes in a coherent way across Europe. European growth is key; it is key to reducing unemployment, to helping some countries increase their competitiveness, and even to reducing budget deficits, because it creates more tax revenues and reduces unemployment costs. Every country has its own responsibility for that”. Deficit-plagued countries must make structural efforts, but he added that countries with an external trade surplus also had to do what they could to sustain economic growth in Europe. He said that his advice for Germany was to consider a minimum wage in services or agriculture in order to distribute some purchasing power to lower-income sectors of the population.

Mr Gallois went on to propose investment programmes to increase European competitiveness in the interest of all European countries, financed by project bonds issued by Europe and managed by an institution such as the European Investment Bank. He gave some examples of competitiveness investments: a digital flow network, European electricity interconnection, innovation in SMEs, renewable energy, or education and training. He expressed his view that the collective return on this kind of investment could be significantly higher than the cost of borrowing.

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