Medef's Fabrice Le Saché Talks French Political Turmoil

Summary

Podcast Summary: Medef's Fabrice Le Saché Talks French Political Turmoil

Podcast: Bloomberg Talks
Host: Bloomberg Radio
Guest: Fabrice Le Saché, Vice President of Medef (France’s largest business lobby)
Date: September 9, 2025

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Episode Overview

This episode features an interview with Fabrice Le Saché, Vice President of Medef, focusing on the current political instability in France, concerns about economic policy, and the implications for French business and investment. The conversation revolves around France's leadership crisis under President Emmanuel Macron, the risks of escalating national debt, and business leaders' anxieties regarding possible shifts in government.

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Key Discussion Points & Insights

1. Turmoil in French Leadership and Policy Instability

• Host sets the stage by noting that France may soon have its seventh prime minister under Macron and asks about the business community's outlook given this ongoing change. (00:22 – 00:55)
• Le Saché emphasizes that the person in the Prime Minister seat matters less than the ability to foster political compromise to maintain pro-business reforms and tackle ballooning national debt.
  • Quote:

    "The important part is: are we able to find compromise, political compromise, to support a pro-business policy and to carry on the reforms that are much needed and change the curve of the debt, which is now skyrocketing..."
    — Fabrice Le Saché (00:55)

2. The Urgency of Fiscal Reform

• Le Saché outlines the dire fiscal outlook for France:
  • Annual debt interest costs are forecasted at €100 billion within a couple of years.
  • This trajectory is "not lasting, not sustainable."
  • Stresses the need for continued investment, tax reduction, and revising social spending, as two-thirds of the debt originates from pensions and social costs.
  • The solution, in Le Saché’s view, is well-known but not enacted due to a lack of political consensus.
  • Quote:

    "We need also to drop down the tax. We need to revise very seriously the social spending. We know that two-thirds of the debt comes from pension and comes from social spending. And we know what we need to do."
    — Fabrice Le Saché (01:23)

3. The Risks of a Socialist-Led Government

• Host asks if a Socialist prime minister could help or harm the business climate. (02:05)
• Le Saché is highly critical of the prospect:
  • Claims a socialist agenda would be a “catastrophe,” referencing policies like increased tax on capital gains (“like in the UK and even worse”), predicting an exodus of entrepreneurs and wealth creators.
  • Emphasizes that only growth and profitability can address the debt, not efforts that “make the country more poor.”
  • However, he acknowledges that Socialists can't govern alone and must seek compromise.
  • Quote:

    "If it's based on the socialist program, it will be a catastrophe because they want to do like in UK and even worse, tax on capital gain, which will be an open door to escape the country for creators of wealth, for entrepreneurs, for business people. And this is not what we want."
    — Fabrice Le Saché (02:18)

  • Quote:

    "The socialists cannot rule the country without a compromise with the other political parties. So we will need to see. But of course, it will be a bad signal, that's for sure."
    — Fabrice Le Saché (02:47)

4. The Cost of Political Instability for Business

• Host asks about current business sentiment during this period of uncertainty. (03:10)
• Le Saché laments that the only “achievement” of recent years has been instability, damaging investor and corporate confidence:
  • Growth is extremely low (0.3% in Q2), driven not by investment or consumption but by “technical storage stock.”
  • Savings rates are soaring while investment remains minimal, reflecting a lack of confidence.
  • Warns of external pressures: US tariffs and Chinese overcapacity.
  • Quote:

    “They have achieved one thing — instability, which is not good for business, because when you cannot obviously plan and expect something a bit stable, you don’t invest.”
    — Fabrice Le Saché (03:25)

  • Memorable Moment:
    Le Saché succinctly summarizes the current situation:

    "The outlook is not very positive. If you add on that the tariffs from the US and the overcapacity from China, the stakes are very high."
    — Fabrice Le Saché (04:06)

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Notable Quotes & Moments

• On France’s Debt Crisis:

  "We will pay €100 billion a year just for the debt interest. This is not lasting, this is not sustainable. We need money for something else, for investments."
  — Fabrice Le Saché (01:08)

• On the Need for Growth:

  "If we need to repay the debt, we can only do it with growth, with added value, with revenues, with profits and not by getting the countries more poor."
  — Fabrice Le Saché (02:28)

• On the Climate for Investment:

  "When you cannot obviously plan and expect something a bit stable, you don't invest."
  — Fabrice Le Saché (03:27)

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Timestamps for Key Segments

• [00:22] – Introduction; context for France’s government changes
• [00:55] – Le Saché: Political compromise and fiscal reform more important than PM identity
• [01:08] – Dangers of skyrocketing debt and unsustainable fiscal policies
• [02:18] – Catastrophe for business under a Socialist agenda; risks of capital flight
• [02:47] – The necessity of political compromise; negative signals for business
• [03:25] – Direct consequences of instability: low investment, lack of confidence, poor growth drivers
• [04:06] – Summary of worrying external pressures: US tariffs, China

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Tone & Language

• The conversation is direct, urgent, and laden with business-centric pragmatism.
• Le Saché speaks bluntly about the consequences of political choices for economic sustainability.
• There is a distinctly pro-market, pro-growth orientation, with calls for stability and fiscal responsibility.

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Summary

French business, according to Medef’s Fabrice Le Saché, is caught in a cycle of political instability and mounting economic risk. While the identity of the next prime minister is less crucial than the pursuit of stable, growth-focused reforms, Le Saché warns that Socialist-led changes could drive away investors and entrepreneurs and worsen France’s fiscal woes. For France to solve its problems, it must prioritize political compromise, fiscal discipline, and encourage private investment to drive sustainable growth. Meanwhile, persistent instability, global economic pressures, and stalled reforms threaten to undermine both confidence and the future prospects of French business.

Transcript

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News Emmanuel Macron's gift to choose who he wants to lead his next government. And the question is, what will that mean for for the country's economy and for the prospects of passing a budget? Let's discuss now with Fabrice Le Sachet, who's the vice president of France's biggest business lobby, medef. Fabrice, good to talk to you again on Bloomberg Radio. Thanks for joining us this morning. I mean, how pessimistic are you about the future now, given that we've gone through another Prime Minister, we're heading for number seven under Emmanuel Macron. Do you think that he can find anyone who can do better?

[Fabrice Le Sachet]

I don't know about this. You know, for us, the identity of the Prime Minister is not the main. The important part is are we able to find compromise, political compromise, to support a pro business policy and to carry on the reforms that are much needed and change the curve of the depth, which is now skyrocketing, putting in danger the country because the interest rate go up and also the cost of paying all these refinancing, all this. And at some point we will pay 100 billion in one or two years. The forecast that we anticipate is that we'll pay €100 billion a year just for the debt interest. This is not lasting, this is not sustainable. We need money for something else, for investments. We need also to drop down the tax. We need to revise very seriously the social spending. We know that two thirds of the debt comes from pension and comes from social spending. And we know what we need to do. So that's the main point.

[Bloomberg Radio Host]

Fabrice, those were the messages, of course, that we heard loud and clear from the last two Prime Ministers. They didn't have any success in addressing any of those issues. Do you think that a socialist Prime Minister could make things better or worse for business?

[Fabrice Le Sachet]

No, not at all. When you read if it's based on the socialist program, it will be a catastrophe because they want to do like in uk and even worse, tax on capital gain, which will be an open door to escape the countries, for creators of wealth, for entrepreneurs, for business people. And this is not what we want. We want to welcome entrepreneurs in this country because if we need to repay the debt, we can only do it with growth, with added value, with revenues, with profits and not by getting the the countries more poor. So no, it will be catastrophic. But the socialists cannot rule the country without a compromise with the other political parties. So we will need to see. But of course it will be a bad signal, that's for sure.

[Bloomberg Radio Host]

Fabrice, what's the danger in the interim period when we're in another uncertain period for French politics? Arguably nothing's really been achieved in the past two years. What does that mean for your members? What does that mean for business in France now?

[Fabrice Le Sachet]

In fact, they have achieved one thing is instability, which is not good for business, because when you cannot obviously plan and expect something a bit stable, you don't invest. And when you see the growth in France, which was 0.3% in the second quarter, a bit more than the expectation, but still low, it does not rely at all on private investment or consumption. The savings are skyrocketing, the investment is very low that show no confidence from consumers and corporations and the growth is only based on the technical storage stock. So this is is not a good sign and the outlook is not very positive. If you add on that the tariffs from the US and the overcapacity from China, the stakes are very high.

[Bloomberg Radio Host]

Okay, Fabric Vice president of French business lobby group Madheff, thank you very much for joining us.

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