France’s Finance Chief Is Ready to Break Things to Fix the EU

(Bloomberg) — The videocall had run through the night and Bruno Le Maire’s frustration was mounting.

The French finance minister had tried economic, financial and even moral arguments to convince his reluctant counterparts that they must pool their debts to save the European Union, officials said.

As dawn broke, he let rip, telling the group that with thousands dying from the coronavirus they should be ashamed of haggling over numbers: ashamed for themselves, and ashamed for Europe.

The diatribe was a typical move from Le Maire, who has emerged as a central, if controversial, figure in Europe’s efforts to find a path out of economic crisis.

His willingness to harangue other governments, central bankers and even the secretary of the U.S. Treasury has often earned blowback for France rather than progress. But on that call in early April it forced a breakthrough: 36 hours later the ministers were back to agree the basis for their response with barely a word of dissent.

“If I hadn’t at some point brutalized the debate, I don’t think we would have found a compromise,” Le Maire said.

The confrontational approach is deliberate, Le Maire explained over a series of conversations with Bloomberg.

By his reckoning, the economic destruction wrought by the coronavirus has brought the EU to a crossroads. It either pulls together to confront its rivals, or it will be sidelined on the world stage and could even collapse.

“This is not the time to be sensitive, it’s the time for action and willpower,” Le Maire said. “Facing the China of Xi Jinping and the U.S. of Donald Trump, there isn’t much room for hesitation.”

Le Maire is following a French tradition of testing the limits of the country’s influence that his boss, President Emmanuel Macron has also embraced.

Until the virus struck, Macron had aimed to give credibility to his demands for EU integration and reform of NATO with a brisk program of economic overhauls at home. Yet while he expended political capital rewriting labor laws and rebuilding France’s tax system, progress on the international stage was meager.

The pandemic forced Macron to mothball his plans to reshape the French economy. But it also created the impetus for EU integration.

Building on the foundations laid down by Le Maire and the other finance ministers in April, France and Germany this month agreed on a plan for joint debt issuance to fund grants to help the countries hardest hit by the virus to reboot their economies. For Le Maire, who worked on the Franco-German compromise in daily calls and meetings with his counterpart Olaf Scholz, it will be remembered as a historic breakthrough that saved Europe from a financially and politically perilous fate.

Now they need to win around skeptical countries led by the Netherlands. And that will mean another round of negotiations with officials around Europe, some of whom are starting to roll their eyes at the drama emanating from Paris.

The European project has been woven into Le Maire’s life from the start.

His grandfather was detained in German prison camp during World War II and his father, despite not speaking a word of the language, became obsessed by the idea of fostering relations with France’s neighbor across the Rhine, Le Maire says.

So as a young teenager, the minister was sent to study in the port city of Bremen. It was formative experience for Le Maire, who is still a fluent German speaker and an all-round Germanophile.

“Fundamentally, Europe is our collective lifeline and our culture,” he said.

Le Maire cut his teeth as diplomat working on French opposition to the 2003 Iraq War and was a junior minister for EU affairs under President Nicolas Sarkozy from 2008.

A challenge to Sarkozy for the leadership of France’s main center-right party established Le Maire as a rising star but his second bid for a top spot ended in humiliation. He went into the center-right primary for the 2017 presidential election among the frontrunners but won just 2.4% of the vote. Le Maire says his mistake was allowing himself to be hemmed in by a formalized campaign and a cumbersome 1,000-page manifesto: “It’s an error I will never make again.”

His career was salvaged when Macron asked him to take over the finance ministry.

Although the two men came from opposite political factions, they shared a preference for playing hardball and a conviction that France needed to encourage people to take more risks and embrace technological disruption. Both pursued literary studies to a high level before training at France’s Ecole Normale d’Administration, the elite school for government officials. Both also quit the civil service, surrendering the pension rights and career guarantees of what Le Maire describes as a “technocratic monarchy.”

The latitude that Macron allows his finance chief is part of the appeal for Le Maire, who manages to write books alongside his responsibilities managing the French economy. Last year, he published a volume about the death of a close friend. This year he plans a novel about the life of a pianist Vladimir Horowitz.

“I believe in the virtue of failure,” Le Maire said. “I prefer to move forward, burn my boats and take every risk.”

Last year, the pair dragged the continent to the brink of a transatlantic trade war by levying an unconventional tax on internet giants that hit some of the biggest U.S. companies.

They argued that companies like Facebook Inc. are contributing to the rise in global inequality as they compete with local businesses while paying less tax and channeling profits through foreign jurisdictions. Trump just saw a grab for American money.

Facebook  Chief Executive Officer Mark Zuckerberg asked Macron for a softer approach when they met in February. 

“Macron told me about it,” Le Maire said. “He said: you’re right, carry on, it’s very effective.”

France had backed off slightly when Macron agreed in January to defer collecting the tax this year to prevent Trump imposing extra tariffs on French goods. But the dispute is set to crop up again, as Le Maire says France will still claim the tax dues if there is no global agreement on taxing tech companies by the end of this year. A spokeswoman for Facebook in Paris declined to comment on the meeting with Macron.

The international posturing has been accompanied by a media blitz at home, fueling speculation that Le Maire is angling to become prime minister should the crisis prompt a government reshuffle. But the minister says he would rather stick out Macron’s first term where he is, taking the lead on European and international matters.

“In this very particular post of finance minister, it’s time that creates credibility,” he said.

What about another run for president? Le Maire says he will support Macron for a second term in 2022. When pressed he switches into English to quote a scene from Shakespeare’s Macbeth, when the protagonist’s ally Banquo implores three witches to tell his future.

“If you can look into the seeds of time and say which grain will grow and which will not, speak then to me,” Le Maire recites.

He doesn’t mention that later in the play, Banquo is murdered by his friend Macbeth, who comes to see him as a threat to his political ambitions.

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