What recovery for the French economy? (Proceedings of the colloquium of February 1, 1994)

Opening speech

Ladies and Gentlemen, Senator,

Allow me first of all to welcome you to this prestigious setting. A place for reflection and decision-making, attentive to the past but certainly looking to the future, the Senate is a venue which we felt was ideally suited to the theme of this symposium: "What kind of recovery for the French economy?

The symposium is part of the Entretiens de la Prévision series. "Les Entretiens de la Prévision" is intended to be a privileged opportunity for exchange. With a focus on forecasting, they aim to shed new light on the long-term evolution of our landscape, and thus contribute to the strategic choices made by players in the business world. The aim of these annual gatherings is to analyze and forecast in order to make decisions.

It was only natural that the Ensae Alumni Association should wish to make its contribution in this field. Indeed, the Ecole Nationale de la Statistique et de l'Administration Économique provides a unique training program in France, with the primary vocation of training statisticians and economists. Appreciated for their ability to combine analysis and decision-making, Ensae alumni now occupy high-level positions in all sectors of the economy, both public and private. In this respect, the theme chosen for today's symposium seemed particularly appropriate, and certainly at the heart of their concerns, as well as those of all economic decision-makers.

In economic, financial, geopolitical and strategic terms, the last decade has been rich in major events. To name but a few: the Gulf War, the fall of the Berlin Wall, German reunification, the opening up of Eastern Europe, particularly Russia... Recent indicators also raise concerns and questions, such as the recession in a large number of industrialized countries, growing social security deficits, and the future of the European Union. But there is no doubt that the effects of these major changes go beyond short-term analysis. Globalization and liberalization of financial markets, growing interdependence between economies, increasing demographic pressure, the rise of low-cost countries and the persistence of long-term underemployment, all lead us to wonder whether it isn't the very nature of growth that is being transformed in industrialized countries. Hence today's question: what kind of recovery for the French economy?

Our morning session will be devoted to finance at the service of the economy. The spectacular development and liberalization of French and international financial markets since the mid-1980s has certainly facilitated financing for both companies and governments. But, as the foreign exchange crisis of summer 1993 demonstrated, these changes may also have contributed to increased instability on the financial horizon, complicating decision-making. We might also ask whether the increased mobility of capital has not, to a certain extent, encouraged persistently high returns on savings. By analyzing the changes observed since the early 1980s, our first three speakers will attempt to answer these topical questions.

The past year has been marked by a financial disruption, reflected in the widening of fluctuation margins within the EMS and a certain easing of interest rates. What impact will this have on the economic recovery? Should we expect a shift in the household savings-consumption balance? Will the reorientation of savings towards longer-term investments provide better financing for businesses? These are just some of the questions we'll be tackling during this morning's second round table.

Mr. Alphandéry will be replaced by Mr. Pelletier, chargé de mission to the Minister of the Economy, who will lead this morning's session, analyzing the financial constraints influencing our country's economic options.

After lunch, the afternoon will be devoted to a study of France's strengths and weaknesses with a view to economic recovery. Will the characteristics of the real economy lead to a moderate and hesitant recovery? Or, on the contrary, can we expect a sustained acceleration in growth, taking advantage of the sound fundamentals of the French economy? This will be our general orientation.

To introduce this second part, we are delighted to welcome Mr. Malinvaud, Professor at the Collège de France, who will bring a long-term European perspective to our discussions.

The first round table will analyze France's strengths and weaknesses in today's global business competition. In a context where the poles of growth have evolved rapidly, notably with the rise in power of the so-called "emerging" countries, do the level of concentration and degree of specialization of French exporting companies put them in a good position vis-à-vis their competitors? Does the remarkable performance of foreign trade since the early 1990s allow us to anticipate sustainable growth driven by the international environment? These and other questions will be the focus of this debate.

Finally, if we accept that the French economy will be able to take advantage of a global recovery, will growth be sufficient to cope with the structural constraints of our economic and social organization? This is the question that will be addressed during the final round table. Faced with what appear to be real challenges, questions will be asked about the effect of economic growth on employment and unemployment levels, the desirability of adopting policies specifically geared to reducing unemployment, and the consequences of the growing public and social deficits we are seeing.

Finally, at the close of the day's proceedings, Mr Champsaur, Director General of INSEE, will provide some cyclical indications on the recovery and his analysis of the indicators that measure it.

It remains for me to introduce Mr. Ouzegdouh, columnist for Radio BFM and former editor-in-chief of the Journal des Finances, who will lead the discussions throughout the symposium. Before handing over to him, I would like to reiterate my thanks to the speakers who have agreed to contribute to our work.

Your large turnout underscores, if proof were needed, the topicality and importance of the issues under discussion. This day has not been conceived as a series of lectures, but as a genuine exchange of ideas; I therefore invite you to contribute your questions, comments or objections to each round table.

Thank you for your attention.

Bastien Charpentier
Vice-Chairman of the Ensae Alumni Association