Revitalizing French business and making France more competitive
This engaging piece in the Wall Street Journal Europe features the Director of MEDEF, the national employers’ association, Laurence Parisot, talking about the challenges facing French business and the EU in general, and how to overcome them to implement growth. What is your experience with French business, and how do practices in France differ from those in your home country?
Because WSJ is often paid-only access, I’ve posted the entire article below. Happy reading.
Breaking France’s Business Mold
EUROPE BUSINESS NEWS AUGUST 2, 2010
By CARL MORTISHED
Laurence Parisot is a household name in France. In a recent poll by Sunday newspaper Journal du Dimanche, the boss of French employers’ organization Medef featured alongside famous actresses as one of the country’s most popular women.
Until recently, the job of running Medef was an attractive sinecure for a retired industrialist, but the diminutive Frenchwoman has broken the mold, using the Medef platform to make business politically sexy; no mean feat in France, where for decades it was a dirty word.
A friend and confidante of President Nicolas Sarkozy, whom she met at Sciences Po, the elite political-science school, Ms. Parisot has just been re-elected for a second five-year term at Medef. Now, she wants to go further and use Medef to promote the interests of business across Europe, and she is looking to the Confederation of British Industry in London, the BDI in Berlin and Confindustria, the Italian employers’ lobby, to achieve that goal.
“In September we will make some initiatives between employers’ organizations between key European countries,” she says.
Ms. Parisot acknowledges that bringing national business interests together will be difficult and will require compromise. Each country has its strengths and its challenges.
Britain’s problem, she says, is its decision a decade ago to focus on financial services—a mono-industry, as she describes it—while France’s Achilles’ heel has been its slowness to bring about structural reforms.
“For Germany, the main problem is they are first in class and they are waiting for others to arrive at their level,” she says.
Ms. Parisot wants EU governments to rally round European champions. For example, she says, “London is the City. As a French person I would prefer it to be Paris, but as a European, I really prefer that we keep the City in London than that some new regulations, such as Basel III, push all the financial people to Hong Kong or Singapore.”
The Basel III reforms to banking regulation are a key concern for Ms. Parisot, who considers the tightened solvency rules a potential threat to the EU financial sector. The drive for tighter regulation is inspired in Washington, she says, even though the U.S. was slow to implement the Basel II rules.
“The danger comes from the U.S., and the impact on the cost of credit and volume of credit will be very significant. This is a very important competitiveness issue,” she says.
Last week she co-wrote with CBI Director-General Richard Lambert and the boss of the BDI a joint letter to the British, French and German environment ministers, castigating them for their support for deeper cuts in carbon-dioxide emissions.
The letter came after Chris Huhne, the U.K. energy secretary, and his French and German counterparts, Jean-Louis Borloo and Norbert Röttgen, earlier in July called on the EU to raise its target for reducing greenhouse-gas emissions to 30% by 2020 from 20%.
“We were very upset,” Ms. Parisot says. “We wrote a tough letter to these ministers. To reduce by 20% our CO2 by 2020 is a big step which costs a lot and which is quite harmful in competitiveness.”
Ms. Parisot reckons Mr. Borloo’s stance hasn’t secured wide support within the French government, but Britain has set out its stall to be at the cutting edge of climate-change legislation. Ms. Parisot is worried climate change is one of many policy areas in which European business risks losing its competitive edge.
She also criticizes DG Competition, the EU’s antitrust directorate, for being too focused on the internal market, thereby hindering European businesses keen to join forces in order to face global competitors.
“DG Competition is less harsh towards Microsoft when it seeks to establish itself in Europe than when two Europeans wish to grow together. I am in favor of competition but it must be on the right scale. The scale today is the planet, with powerful new forces being built in Brazil, India, Indonesia. We must raise the bar together.”
Ms. Parisot wants European employers’ organizations to find common ground for some projects, even in the area of industrial policy, a subject she describes as taboo in Britain. For example, she argues, Europe needs to coordinate its efforts in nuclear power.
“Areva and Siemens split. Siemens is looking towards Russia and Areva towards Japan. Isn’t it crazy? We all know energy will be the most important thing for 20 years forward,” she says.
Ms. Parisot insists she is not an interventionist, and she has a track record in France of being on the political right, an economic liberal, opposing subsidies and campaigning for economic reform. She is a businesswoman to the core, having inherited Parisot Group, her family’s private furniture business. And with family backing, she bought 75% of Ifop, the French polling organization. In her first term at Medef she promoted key economic reforms, including raising France’s state pension age by two years, and she recently forced the government to retreat on measures such as the imposition of a carbon tax and curbs on executive pay.
She also describes herself as a “very strong feminist” and has promoted a new law, currently in Parliament, requiring that women make up 40% of the boards of leading companies.
It is a reform that strikes a personal chord for Ms. Parisot. Aged 50 and unmarried, she says she has battled discrimination at every stage of her career, and she reckons the climate for French professional women has deteriorated over the past decade.
“I encountered misogyny every day, every morning. Sometimes you don’t see it. Sometimes I didn’t understand why I didn’t get a contract,” she says.
She believes Europe needs to harmonize. Even on taxes? Yes, she says, and that means bringing business leaders to the political table. In the past, progress in Europe depended on good relationships between the French president and the German chancellor. Today, she says it has become too complex for governments alone to form policy and do deals. There must be a compromise and business must be part of the deal.
“That is why I push my colleagues from CBI, from BDI and from Confindustria. If we think European competitiveness is an issue, we have part of the responsibility to move forward,” she says, adding “If we continue [the way we are going], I am pretty sure we will be weaker and weaker. L’union fait la force. The potential if you put the U.K., France and Germany together. Can you imagine the potential that represents? If we don’t react, China will swallow us. And India, too.”
—Carl Mortished is a writer living in London.