Noyer Says French Politicians Need to Be Courageous on Economy

Bank of France Governor Christian Noyer said French politicians need to be “courageous” in revamping the nation’s economy in the face of cultural resistance to change.

“In France it’s particularly difficult because we have a social and administrative model, that is interventionist and there is resistance within civil society,” Noyer said at the Economic Ideas conference in Nancy, France. “People fear losing something. They say ‘I have my special regime, my advantage, my micro avantage.’ So it’s very difficult to make it happen.”

French politicians need to be willing to risk failure in fixing Europe’s second-largest economy, Noyer said.

“I accept the fact that it’s very difficult when you’re a politician, which I am not,” Noyer said.

Ministers also need to publicly recognize that euro-level decisions are made collectively and not simply imposed from outside, he said.

“If we weren’t in the common currency we would have needed to have the same discipline, but we would have come under market pressure much earlier,” Noyer said. “We would have been obliged to come to budget discipline much earlier.”

Similarly decisions made in this year’s support package for Cyprus suffered from the perception that they were simply imposed from abroad.

“Could the Cypriot polticians say, we’re in this situation because we managed badly, therefore we have difficult decisions to take?” Noyer asked. “It’s difficult to go and explain this situation. Instead the impression was that this was imposed by the European Union and Brussels. But that wasn’t the problem. If they were outside the EU they would have been confronted with the problem much earlier. The decisions were inevitable.”

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