Departing International Monetary Fund Chief Economist Olivier Blanchard [1] gave the 31st annual Mais Lecture at Cass Business School, on 7th October 2015. The annual Mais lecture is regarded as the City of London’s foremost event for the banking and finance community, and is attended by senior practitioners and academics. Since its inception in 1978, the Mais has maintained a tradition of prestigious speakers such as Tony Blair, Gordon Brown, Mark Carney, Mervyn King and George Osborne. Mr Blanchard shared his views on growth perspectives and macro-economic problems that developed and emerging countries are facing. Politique.com participated and interviewed Mr. Blanchard about the current economic situation in France.

Politique.com – Mr. Blanchard, as an ex-chief economist of the IMF and a now a Fred Bergsten Senior Fellow at the Peterson Institute for International Economics, what is your opinion about Mr. Macron [2] and the policy he is currently conducting?

Olivier Blanchard – He has understood that the government does not have the mandate to make real reforms and that it was thus necessary to work on the side, on a series of small things to try and move forward. The danger is that it remains mostly symbolic, and fails to introduce any in depth change. But one can think on the other hand that it triggers some kind of movement. Personally, I believe that France needs more ambitious reforms.

Politique.com – For instance, in September, Jean-Denis Combrexelle submitted a report [3] on the project to reform the French job market, commissioned by Prime Minister Manuel Valls. Besides Emmanuel Macron underlined the interest of revising the Labour Code. [4] What do you think of the action of the government on this point?

Olivier Blanchard – Indeed on this subject which I have already had the opportunity to raise with Jean Tirolle, I would prefer a more ambitious reform of the French Labour Code. But there is a political reality and Emmanuel knows it better than I do.

Politique.com – Whereas the Prime Minister, Manuel Valls, had already expressed his wish to start “a new reassessment of how to expand the use of collective bargaining in our labour law and define new social standards”, [5] Mr. Macron would also like to make much wider use of industry-wide agreements in order to leave more leeway to social partners. Is this the right way to go?

Olivier Blanchard – It is necessary to find the right solutions. I think that it would be a good thing to decentralize salary negotiations and to give a little more flexibility to companies. His attitude is to do things gradually.

Politique.com – You used to be chief economist at the IMF, and have often been seen as a contender for the Nobel in Economics. From now on, released from your duties, could you envisage a political future in France?

Olivier Blanchard – No, in no case.

Edouard d’Espalungue

Notes :

[1] Olivier Blanchard spent most of his professional life in Cambridge, U.S. After obtaining his PhD in economics at the Massachusetts Institute of Technology in 1977, he taught at Harvard University, returning to MIT in 1982. In 2008, he took a leave of absence to be the Economic Counsellor and Director of the Research Department of the International Monetary Fund. Since October 2015, he is the Fred Bergsten Senior Fellow at the Peterson Institute for International Economics, in Washington. Together with Robert M. Solow he is Professor of Economics emeritus at MIT.

[2] Emmanuel Macron is the Minister of the Economy, Industry and Digital Affairs since 26 August 2014 (the Second Valls Government).

[3] The Combrexelle Report: “Collective bargaining, Work and Employment” focuses on the need to reform the Labour Code in order to “move away from a prevailing logic in which law is pitted against economic efficiency. The proposals 24 to 29 in chapter 3 underline the problems posed by bills flow resulting in obsolete provisions replaced by new provisions not being repealed and the rigidity of the architecture of the Labour Code. The interest in redesigning the conditions and the working time as well as employment and wages is also argued as well as the ability for the partners to resort, within the framework of the prior cooperation, to the inter-professional national agreement or the “common position”

[4] Emmanuel Macron said in an interview in connection with the reform of the Labour Code that: “I am not obsessed by the size of the Labour Code. It is no use reducing the Labour Code if it results in increasing jurisprudence and the instabilities this generates. The important thing, it is to make sure that the law specifies and stabilizes the necessary general rules and gives more place to branch or company agreements and thus to social partners. That supposes that trade-union organizations adapt to the evolution of their responsibilities “. Quoted in We must continue to reform the job market in-depth”, Les Echos, 6/16/2015, by Marie Bellan, Etienne Lefebvre, Frédéric Schaeffer and Dominique Seux

[5] Statement made by Manuel Valls, April 2015. Quoted in “The report which wants to revolutionize labour law”, Le Monde, 9/8/2015, by Bertrand Bissuel

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