Macron Addresses U.S. Financiers on France’s Fiscal Challenges

By Nupur Anand and Michel Rose
Location: New York/Paris

French President Emmanuel Macron met with top U.S. financiers during the U.N. General Assembly to discuss France’s financial challenges and the potential for future tax increases. Macron, with a background in investment banking, aimed to reassure Wall Street executives about France’s fiscal outlook amidst concerns of a significant deficit.

During a one-hour meeting with 13 senior financiers, including prominent figures from Goldman Sachs and Blackstone, Macron provided a transparent assessment of both the French and broader European economies. He mentioned the likelihood of tax hikes to fund the country’s budget, addressing France’s economic challenges candidly.

Despite the potential tax increases, Macron promoted France as an attractive destination for investment and discussed how to enhance business relations with multinational companies.

Macron has established strong relationships with meeting participants through seven years of “Choose France” summits aimed at reshaping perceptions of France as a pro-business environment. As his new minority government commenced budget discussions amidst a potential deficit exceeding 6%, the discussions were timely, following a similar gathering during the Paris Olympics.

Amid Europe’s economic slowdown, Macron indicated targeted and temporary tax increases may be necessary to stabilize public finances, representing a shift from prior tax cuts for large corporations under his leadership. He urged investors not to overreact to any tax changes, emphasizing a focus on spending reductions.

With foreign investors holding approximately 50% of France’s government debt, higher borrowing costs than Spain indicate lingering investor concerns. Although Macron avoided making promises, he proactively engaged with business leaders ahead of Prime Minister Michel Barnier’s announcement concerning plans to reduce the deficit through spending cuts and temporary tax increases on corporations and wealthy individuals.

Discussions also touched on topics like artificial intelligence, nuclear energy, and regulatory measures, reflecting a broad agenda aimed at addressing fiscal and investment priorities.