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Wednesday 04 October 2017

François Villeroy de Galhau: “I believe in Europe – this model of diversity, solidarity and peace”

The Tribunes association – a partner of the International and European Institute – was honoured to receive its first ever visit by the Governor of the Banque de France.

The agenda for this debate included the head of the French central bank’s attachment to Europe, the need for reforms and his hopes for a strong France within Europe. 

Who is François Villleroy de Galhau? When appointed as Governor of the Banque de France, this discreet public personality was propelled to the very top of the French civil service.

François Villeroy de Galhau is a graduate of the École nationale de l’administration, the national school for senior civil servants (in the “Louise Michel” class of 1984) and of the École Polytechnique (class of 1978). He is proud of his strong allegiance to the French civil service: after a period as a European Advisor to the Ministry for Finance, he became Dominique Strauss-Kahn’s Cabinet Director in the Jospin government before becoming Director-General of Taxation between 2000 and 2003.
His experience in the private sector began in 2003 when he was appointed CEO of Cetelem, thus becoming a mainstay of the BNP Paribas Group, where he served as Deputy Chief Executive Officer from 2011 to 2015.

In 2015, his appointment as Governor of the Banque de France raised doubts regarding a possible conflict of interests, given his links with the banking sector. However, this committed European is quick to proclaim his independence from the corporate world, and his determination to “act as an honourable and free man”. 

“Clarifying the economic debate is a key issue for democracy”

In the era of the Euro and the European Central Bank, the existence of a national central bank might seem to be of secondary importance. Our guest was determined to prove otherwise, by drawing attention to the essential role of the Banque de France as an active component of the Euro-system. “The Banque de France operates at the macroeconomic level within European economic and monetary policy” explains Mr Villeroy de Galhau, “but also at a microeconomic level, particularly by helping SMEs and households”. 

This latter role, although not very visible, is essential to French economic and political life, maintains our guest. Deploring the fact that the general public is not better informed about the economic decisions that are essential to the future of France, he would like everyone to benefit from “an economic and monetary education”.

“To move towards full employment, we need reforms” 

During his speech, François Villeroy de Galhau also turned his attention to what he calls the “three French deficiencies”: GDP growth that is below the European average, insufficient competitiveness and a general lack of economic vitality. “The challenge of the Eurozone in France is that we are not on an optimal growth and employment path”.
To tackle unemployment, which he considers to be “the most urgent situation that France currently faces”, the senior civil servant urges political decision-makers to undertake radical reforms of the national economy. 

In this way, he is calling on the State to commit to reducing public spending and taxes, improve the professional integration of young people by giving a boost to work-study training and to continue the process of reforming the French Labour Code. Despite his attachment to the European social model, Mr Villeroy de Galhau expresses his concern about the excessive costs of French social policies. 

“Europe is a perfectible model”

François Villeroy de Galhau makes no effort to conceal his European-mindedness. In his book L’Espérance d’un Européen (Hopes of a European), he defends the idea of a vocational Erasmus stay for young people without qualifications, to allow everyone to participate in the development of the European identity. 

He also recommends better coordination of economic policies at the European level, the creation of a financing union for investment and innovation, and the implementation of a European budget for all expenditure in the common interest – particularly on security and defence.

When asked for his opinion on the rise of Euro-scepticism, Mr Villeroy de Galhau maintains that it is waning: indeed, according to an “Elab” survey for Les Echos, nearly 72% of French people declared their attachment to the Euro, which is the highest level since 2009, explains the head of the French Central Bank. The man who considers Brexit to be an “economic gamble” warns against any vague impulse to leave the Euro: “France would lose €30 billion per year if it decided to leave the Eurozone”.

Statement collected by the International and European Institute

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