00:00Well good morning everyone and welcome to France. Bloomberg France decides the chief executive officer briefing on Francine Lacqua here in London. And here's what's coming up on today's program. France's CPI figure hits five point one percent to another record. The war in Ukraine stokes inflation. Across Europe the cost of living becomes a top concern for French voters. McCall feels the heat the incumbent's lead narrows. His main rivals pledge more radical steps to aid households. And stay with Bloomberg TV because joining us today to discuss all of this the French state's election. Well Stephanie one young cook the MEP from McCall's like Karl Marx the chief executive for the manufacturer of single gambling lobbies and the so-called queen of French tech that is the station director at Cox and Verizon. If you have any questions for any of our guests please IBEX. Plus TV go now. First things first let's check in on the markets because it is also the end of the quarter. So we focus on politics. We look at France and of course that inflation debate without forgetting what's going on in the wider market. The focus firmly not only on oil but also equity markets European stocks. Six hundred. You can see pretty much flat to the S & P. Futures on the way up but not as much as they were 10 minutes ago. So I wouldn't call it a reversal but certainly stocks a little bit on the cautious side after there have been these reports that the Biden administration is considering a massive release of crude from U.S. reserves to combat inflation. And you can see I guess that's stoking a little bit of optimism that inflation will be a tamer than we see what happens in terms of earnings which is why European stocks pretty much unchanged. So this year's presidential election presents a crowded field of candidates. Let's take a closer look at the main contenders in France. First up the centrist incumbent Emmanuel McCall. Polls place a 44 year old president as favourite to win the election but with a tighter margin than back in 2017. His lead over contenders has been shrinking over the last few months. The far right has undermined national national candidate. Marine Le Pen has been tipped to face McCall in the final round like she did in 2017. However she continues to face the challenge of changing her party's xenophobic image and confronting her past links to Vladimir Putin. On the opposite end of the spectrum we have left's main candidate Vonnie Quinn Shaw a staunch critic of McCall's economic policies. The 70 year old is polling in third place but still a long way off the almost 20 percent of the vote that he received back in 2017. But because says the center right candidate for Jihye Lee become initially seen as McCall's main threat to faltering campaigns so far has seen her slip in the polls in the past. She described herself as two thirds Angela Merkel and one third Margaret Thatcher and finally another contender for the right wing vote as an exemplar. The far right challenger burst onto the political scene in 2021 after he shook up the campaign with his immigration 0 rhetoric. Now for a look at the polls. The president's McCall's lead has narrowed. That's according to the latest polling average calculated by Bloomberg. The gap between him and second place Lupin is down to seven point three percent percentage points while the other candidates vie for third place. Now the main concern of French voters is of course spending the cost of living tops concerns with many in France feeling their purchasing power has deteriorated in the last few years. Now we're joined now by Stephanie Young Qatar and hooks on. So thank you all for joining us. We're going to have about half an hour to really debate some of the policies and what you want to see from the next government. But let us let's start off with you because you're in charge of a fairly big company. You deal with supply chains. You deal with a lot of the inflation figures coming in. What do you need from the next government of France. Chief Fujitsu Europe say goodbye and we always planning a long term. So for me what is very important in times like the ones we leave in France and in Europe today is to invest for the future. So it's investment on innovation. We need to go to ISE in transition explanation of buildings should. Energy efficiency needs to decarbonise buildings. So investment on innovation investment on education. We need new skills for the next 10 years to deal with digital with new materials with new competencies to deliver on the plan for France 20 30. We need also a very strong framework in Europe. So we need absolutely to continue to invest and lead it in Europe as the legal framework in which the companies the citizens can live and grow. We need of course and energy policy which is strong and which will overcome the crisis. To do so for me what is important is to project the country in the future. We are doing as a corporation for the next 10 years to invest on the future and may mean ISE could be dropped. Innovation and education. Thank you so much. Good night Stephanie. A bullet laid out in some of the concerns. What do you think this election will be actually voted on given the war in Ukraine. A tendency is people want stability and actually look for comfort. If there wasn't a war in Ukraine is it the cost of living. Is it actually something else that people worry about in France. Is it immigration or is it really the living standards. Well as you were Haidi Lun should be. Hi. Good morning. How's your Haidi Lun are idiots and raised the issue of of the cost of living constant which definitely is the top priority of the people in France. I just wanted to mention that some French presidents were fired over the last five years. Amanda Lang was achieved a very great deal of success and and of reforms despite the history major crisis. And the third one which he said the war in Ukraine. I just wanted to flag that. I think Amanda Lang and we'll continue to do that task definitely to change the philosophy of France. I mean his five year term which our country has become I think Mark for a business he has given kind of capitalist culture by creating an unequal system favorable to companies and foreign investments be able to project in the long run. And as soon as it has already been said with this France 2030 it has been able to also to make them more market more flexible bring this ready to add stability John Tucker. So I think this is the fitting at the same time. Yeah and it is important which is why you're seeing him actually play quite well on the economy which we'll get to in a second. But he's failed in terms of pension reforms. That's something that to keep in mind. So I don't know what happens if he gets re-elected to that. And he's also struggled in dealing with the yellow vest movement. Well yeah I mean every year every president in France has to struggle and resume with many protests in France. That's the rule. And so of course there are many many concerns when it comes to purchasing power of people. And this has become one of the of the key concern during this election. And it will be also won a major step to change within the next the following years. But when it comes to the you know rest protest I mean I think he has a definitely did try to change things and to and to help people. When you look at the statistics I mean he has achieved one of the main objective he had in 20 years. And I said on jeans which was to draw in the unemployment rate. And this has been Dani Burger. So of course. And you mention the war in Ukraine. I mean you have faced so many crises that he couldn't give that all your reforms. That's why we need five five years more than. And you have a very interesting perspective because you of course you are from like you become so Amanda Lang McCall's party. But you're also one of the few French MEP with direct impact on drafting some of the Digital Market Act position for the European Parliament. Oksana tell me a little bit about what you need. So if you look at startup funding in France they've actually increased quite a lot in the first half of 2021. Do you still see that money flowing into France. Stephanie right now from from outside investors France has finally seen as a fully investable place. Completely. I think the last five years have been transformative for friends. I think we have seen especially in terms of innovation and company creation. I think it's been at a record high and it just keeps increasing year over year. Stephanie mentioned unemployment at an all time 15 year low. I mean I think these are elements that we definitely need to continue. And then from a startup perspective I think there has been so much that has been accomplished that we need continuity we need stability. And I think that this is a president that has understood this population the needs of the young companies very very well. From the other candidates. We see attempts but nothing anywhere near what President Michael ISE has accomplished. And the understanding that he has not talked to me a little bit about exactly what you see a second term for President McCaughan delivering in terms of I don't know whether it's more reforms. I don't know whether it's just subsidies because we're still in a war and we just need to fix the cost of living. I know you were mentioning as a CEO what you wanted. What do you think his number one priority in a second term should be. I think you know we have seen a great deal of improvement on the liberal market and some big achievements in Francine Lacqua apprenticeship last year alone rehired five thousand eight hundred new employees in France half of them be below 26 years old. So these labor market is not fluid. The attractiveness of industry we have changed. So turn around the image of industry. We need industry. This government has pushed a positive image of industry going for longer. We need to accelerate as I said the investment on innovation because we have a lot of technical technological disruption ahead of us. We need to invest on education. We need a third tool. So continue to make reforms on the governance of the country in the world which is changing extremely fast. On geo politics on digital on technology we need a governance which is very fluid very agile. This is what we are doing when we are heading. Operates like like a hangover. So I think the competitiveness of the country it's not only the taxis. It's the attractiveness of jobs which has changed a new trend. But what sort of governance to make it a Jason Kelly. So for me accelerates and on innovation investment accelerates education. You know some schools to universities. And third continue the reform to make agile governance fast decisions down to the ground close to the business is to the people that drive governance. We've had France accelerating in the 21st century. All right. Meanwhile how are you dealing with energy inflation. Do you have to pay actually people more. And how worried are you about supply disruptions being accelerated because of Covid in China. Well this is something we have faced over the last two years and a lot of supply chain disruption. It's true in France. It's too soon in the US. Last year we had 260 cases of Fox measure suppliers shutting down in North America. So it's it's true around the world. We have created within saying about a very look a giant organization where our managers on the ground take very fast decision and overcome every single crisis. So this year is another challenge because of the war in Ukraine. We have to overcome that. Yes we have to cope with higher inflation and we are going to leave the world with higher inflation. We have to pay NASDAQ into a salary. Salary increases are one one point five percent higher than they used to be. Sima on the pricing to customers. So this is the new world we are living in. And we have to adjust. Adapt. We have done that remarkably. We had said goodbye last year. We had the best year ever. Why. Because we are driven by energy efficiency on buildings. I think President Clinton has understood that the best way to decarbonise transit to achieve carbon neutrality by 2050 is to tackle the carbon emissions from buildings. They make 30 40 percent of the CO2 emissions we have deliver that same amount to double that. And president because already decided to accelerate and to block more investment on energy efficiency for buildings lined it with a fit of 55 per RTS coming from the EU so that I will let it finish it. So I think that we could see we should see in the figures. I mean I'm trying to get someone to say something bad had this current government. Stephanie talked to me a little bit about debt. So of course I know we're going from crisis to crisis. We had Covid for two years. Now we're looking at the war in Ukraine. Do you worry about debt levels in France. Debt has been rising in all European countries just because of the fiscal nature of what we had to do to support them. At what point should maybe France and other European countries look at austerity. Yeah well I think time and night to tackle the crisis you know and you remember that when the weather Amanda Lang his government spoke to monitor this whatever it costs approach. Many people love and underwear and accused him of raising the debt level even more higher. But you may remember that some weeks ago Paul Krugman which is the well-known NIKKEI Nobel Prize begun only just to approach and say that this approach was a risk that definitely paid off. And it wasn't really the right choice to keep the economy strong through the challenge of crisis. So I think yes there is no risk of that rise. But I mean right now we need to tackle the crisis. I mean the pandemic is not over and the war in Ukraine is still ahead of us. But in addition to what was said I mean the twin footprint proposition and fighting against via the global warning is not just a catch phrase. You know there is a concrete outcome which has just been adopted as Shery Ahn goblin. The broader adjustment mechanism regulation by the consumer. And I'm on the 15 solver of a march. And it's a major step. You know it's a difficult. Come on. Let me just amazed me. Just add to it to step up the decoupling position as well as through you know put term more equality know in the industry. So I think this is a key. And talking about the twin transitions which are ISE the books on a ISE when I said you know climates and digital even you thought war in Ukraine is hiding in IBEX. We've done a major major step also on the on the on the on tackling the gaffer and the big tax by regulating them. Exon something we've just reached an agreement with the European Parliament the council and the commission which is just unprecedented. This is place I want to talk business. Yeah. So let me talk also about specifically the tech sector hoax and I know you touched on it but when the newly elected McCaul said in 2017 I want to be France to be a startup nation. His detractors mocked him. But if anything France was struggling to attract venture capital liking both the UK and Germany 2016. Now French startups as we're saying are pulling in record funds. Now the promise of digital tech has really played a growing role in the French economy leading to an explosion in cybersecurity attacks. Now last month the new cyber campus opened its doors with private companies public bodies and government departments joining forces to spearhead France's new cyber strategy. So when you look look China as some of the things that I guess the seeds that have been planted. What exactly do you need. Does France need to make sure that some of these startups are then fully hedged fund. You know a fully funded companies. Can we have the next Facebook maybe or the next matter. The next Google in Europe and specifically France. Completely and I think that is actually one of the goals that he set forward. I mean France's initial goal was to have 25 unicorn companies by 2025. That goal was actually hit three years early at the beginning of January. And so the new goal is now to actually create the European tech leader by 2030. And so I think that's actually a goal that that's kind of an outline. And a lot of companies are probably on track already to hit that goal. But in terms of what we've seen I mean we have definitely seen record levels of funding record levels of companies being created. I think a lot of it has been the president himself and what the government has done. But I also think we need to put it in a context of the geopolitical context with what's happening in some of the other more traditional leading ecosystems. Silicon Valley got insanely expensive. We also had Brexit in the UK. So you know a lot of places that entrepreneurs would traditionally go. They they started looking elsewhere. And I think it was at that key moment that France really started to rise to the forefront. I was in another thing that has started to happen. But we definitely need reinforced and continuing well would be with regards to everything that welcomes international investment and international talent into France. And that's obviously a very touchy subject. But that is what's really going to help us create those leading international companies of tomorrow. IBEX is there always a danger that actually the more international money there is the more present Michael Barr is going to be attacked on that on the fact that it's not French enough. That's actually there's still an underlying socialist current that runs through that for example for American investor. It's very difficult to grapple. And so what comes after my. We need to start thinking about that now. Exactly I think. I think it's it's a very thin line to walk but if we look at the tech sector if we look at these young companies that are scaling fast and want to go international quickly that is exactly what they need. You. And the chief executive bonobos are still with us. How do you see the next government being formed. So I know it's very difficult but you're in the thick of things as a chief executive. What kind of prime minister do you think the new government could benefit. What kind of pivots could mean that some of the reforms laid in place which all three of you seem to like can really be accelerated. No. As it is I prefer to steer away from those discussions. To do that I still have a lot of job to manage my own team. So I would be cautious on that. No. What is important is the ability to push through reforms. As I say you know we still have a rather complex public governance in France with multi layers of administration whether it's in the departments in the regions the national states or I think the ability to reach a kind of consensus on the broad base and therefore deliver on the needed reforms as fast as we need. I think that would be if your key criteria of any government going for money the ability to be longer is the ability to gather strong momentum so that we can deliver reforms which are needed quite quite fast. So that's it for me. May mean ask. I would say for the next the next year you have a very interesting company because of course you produce glass insulation you know high performance ceramics plastics abrasive. How how much of a nightmare actually is supply chain right now. Because freight costs are so much more expensive because certain ports in China and elsewhere are closed. And also a lot of these materials I imagine come from the Ukraine region. No actually we have changed the organism of say about four years ago to make it look cool. Country by country. We are tackling 90 percent of all businesses on concepts and markets. They are local by nature and we have local plans with local customers and local managers. 90 percent of our country used. We are organized by country down energy from the countries. So for us we don't have a large supply chain coming from Asia to Europe. This is not some make us on North America in Argentina or Argentina. In France for friends and for intentional we a few weeks ago chortled. So the confidence we have in France to invest under 20 million euros of CapEx for new insulation matures. So it can be used because there is the boom in Texas needs for that. But we took decisions locally. So these local governments we are multi local organization has made it very robust to say the Covid which was country by country to fight participation destruction of last year and even to Shery Ahn and to fight of course any more political issue coming in from out. So it's it's a very robust gentry based organization. I also spend a bit more time on inflation. Thanks for that. Now with the cost of living. The chief concern to French voters today's latest figures make grim reading. We did talk about this a little bit with our guests. French inflation accelerating more than expected to reach another record prices raising five point one percent from a year ago in March. The most since the data series began in 1997 that the outlook actually is not much better. Household's expectations for future price increases have hit the highest level since records began back in 1972. Price struggles have plagued Marcos presidency with gas taxes actually sparking a prominent and persistent yellow vest process. So Stephanie when you look at some of the challenges in terms of inflation how do you think a second presidency for Amanda Lang McCaughan. I don't know whether you would go as far as saying as this has now a given just looking at the polls and the system and France role here you know be a different president. What kind of team will he surround himself with and will he be a braver president or actually is is it more difficult. Are we going to see many more reforms the next five years. You want to. I do. What Roxana was just sent on the fact that we need to push for more reforms. And as I said previously there's three major crises yet almost pandemic under and the war in Ukraine has prevented nuts. We should welcome the year economic rebound following that the Covid the Covid us comeback to. I think that the trick crisis in record time and France has been leading in the back. I think we should as you said be very attentive to India. Inflation and efficient levels are of course very high. And the impact is magnified by the war in Ukraine promoted by make by Russia. But of course and I'm sure that Emmanuel Michael Barr will carry on pushing for reform. Now he's a strong admittedly strong witness from the start to do that. And I think the pressure on reform is one of the major project an initiative I'd like to to take us through NASDAQ gun provided is is addicted again. He's reelected. So we only have three minutes left. So I'm going to ask each of you actually the same question. Stephanie if we start off with you. If you look at McCall's biggest dream which is more European integration. If he gets re-elected which again the polls really sink suggests that is the main possibility. Will he get. Will he managed to get more European countries behind to push for integration. Yeah well I think he has already been committed to work to Europe in a in a very realistic and pragmatic approach and is you still carry on building this new world of economic prosperity based on green digital and inclusive bros. And we push for that within Europe and her city. Leading Lady Straw allows the president on Europe for six years. Okay but why in 20 seconds do you think. Humanity. Thank you Stephanie. Good luck. It's just you know I was in Poland for the last two days. There is a great hope from Poland support Europe to have more Europe in the coming years for this energy policy or just the new president whoever it is. And my quote being the leading edge Europe for the last few months as the head of Europe we need to lead Europe to see a secure continent for innovation for competencies and philosophies. We are stringent. You all right to be part of that. Thank you. But my buzzer sounds rather. And Stephanie Yvonne Man staff will have plenty more of course on France decides. This is Bloomberg Daybreak.

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'Bloomberg France Decides: CEO Briefing' (03/31/22)

With less than one month to go until the French Presidential election, the cost of living tops the list of concerns for voters. The war in Ukraine sends France's inflation to yet another record high. Emmanuel Macron sees his poll lead narrow, his rivals pledge more radical steps to aid households. 'Bloomberg France Decides: CEO Briefing' has Francine Lacqua in London discussing the state of play in the upcoming election with Stephanie Yon-Courtin - MEP for Macron's La Republique En Marche, the CEO of French manufacturer Saint-Gobain, Benoit Bazin, and the so-called 'Queen of French Tech' -- Station F Director, Roxanne Varza. (Source: Bloomberg)