“Mr. President, I am writing you a letter.” But this time and for the second consecutive year it is not Boris Vian, but the Governor of the Banque de France who is the author. An eighteen-page document, made public on Monday, to fulfill a promise: to reduce inflation to 2% between the end of 2024 and 2025. And François Villeroy de Galhau treats the issue as a doctor treats a disease, an economic and social problem. disease that he intends to end. Because according to him, she was taken… on time.
Diagnosis
“Doctor” Villeroy de Gahlau does not plan, he promises to treat the disease for his life. It is a compromise: inflation will be reduced to 2% by the end of 2024 – 2025.
For him, the effects of this disease are perceived more harshly than they really are, and the governor of the Banque de France downplays the symptoms. Purchasing power, supposedly seriously affected, according to him finally held in 2022. And it should be again in 2023.
Not as dramatic as one might think, then. The patient is not in such bad shape. Whatever you think.
On the other hand, the danger may come from the uncontrolled price-salary and price-margin spiral in certain sectors. But these two risks now warrant increased vigilance rather than a global alert. Basically: it’s not that bad. You just have to look at the constants.
The cure
For the Governor of the Banque de France, it is more monetary than budgetary. Although the first weapon was budgeted in France. The tariff shields established since 2021 have been effective in temporarily cushioning the energy shock, but they cannot make it disappear.
But today the cure must therefore be of a monetary nature. You have to get out of whatever. And the treatment has already begun: without causing the dreaded recession, the Eurosystem has acted quickly and forcefully for a year. Today, credit is logically more expensive in Europe: however, it is in France that it remains the most favorable and widely accessible for both households and companies. The strength of the French banking system protects it from specific problems experienced by certain regional US banks or by Credit Suisse. The patient France has good grounds for him.
However, it is necessary to implement a fundamental treatment, in four dimensions so that the French patient finds good health. The first two, energy and climate transformation and digital transformation, are European responses, adapted to a common evil.
Two dimensions are aimed more specifically at “bad French”, and there is no magic potion. We must achieve the transformation of public services and thus improve the efficiency of current spending to better respond to that of the future. Extensive program…
A key concept: trust
And above all transform the essay on the question of Work. The unemployment rate is certainly under control, but the job must be individually more qualified and more attractive. For 52% of French companies, the main obstacle to production today is… recruitment.
And François Villeroy de Gahlau ends his letter with a capital notion: trust. Otherwise, recovery is almost impossible. Restoring the confidence of the French hard hit by this wave of inflationary fever, that is the whole question of this treatment of the funds to be administered to France.
Source: BFM TV
