French central banker calls for modesty but results on eurozone
Enough talking, just do it.
That’s Sylvie Goulard’s message to France, Germany and the rest of the EU ahead of their Euro summit later this week.
“Worldwide, the daily ups and downs of internal European discussions … are not followed in detail,” the deputy governor of the Bank of France emailed Brussels Playbook on Tuesday from Buenos Aires where she is attending the G20 meeting of finance ministers and central bankers. “What makes you strong at the global level is your ability to deliver. As long as you have not provided results, your efforts [will] remain below the radar.”
In a rare media appearance since taking on a new role as a central banker in January, the former MEP and (briefly) former French defense minister for President Emmanuel Macron said it’s not the creation of an EU finance minster or a eurozone budget that counts; despite Macron’s push, both are unlikely to happen any time soon. Goulard instead advocates smaller-scale but more realistic reforms.
“Many partners appreciate the proactive, multilateral agenda of Emmanuel Macron on trade, as well as on climate” — Sylvie Goulard
“Plans on the governance of the eurozone will convince [the world] the day they will generate prosperity across the Continent and make Europe a clear leader in innovation and inclusiveness,” according to Goulard. Deeper integration through capital markets, or a “‘financing union for investment and innovation,’ as suggested by Banque de France Governor François Villeroy de Galhau would contribute to this aim,” she wrote.
Already, things are better today compared to a few years ago. “For years, the euro area has been a matter of concern in global discussions. It is no longer the case, and the contribution of the euro area to the world growth is again positive,” she said.
Goulard was one of Macron’s earliest supporters when he was testing the waters to run for president and does not forget to tout his ambitious vision for France and beyond.
“Many partners appreciate the proactive, multilateral agenda of Emmanuel Macron on trade, as well as on climate,” she said. “They observe that the French authorities are delivering internal reforms. Germany has now a new government. The conditions are met to move forward.”
But again, Goulard cautioned: “Let’s be modest.”
Take Thursday’s European Commission conference on how to finance the fight against climate change, which Macron will attend. The biggest challenge is “to channel the abundant European savings into sustainable investments,” she said. “The money is available. The needs are identified: in particular, energy transition, development of green transportation, transformation of the agricultural sector.”
“Of course, in democracies, the main policy choices are political decisions taken by accountable governments” — Sylvie Goulard
However, the devil’s in the detail, and calling something sustainable doesn’t mean it really is. “A lot of work has to be done to define which projects deserve a sustainable label,” Goulard said, while “we should increase cross-border financing to better allocate the available means, drawing [on] all advantages from the scale of our internal market.”
But what can central banks actually contribute? Her reply: “Of course, in democracies, the main policy choices are political decisions taken by accountable governments. Central banks can nevertheless play a role. Being in charge of financial stability, they have to face that climate risks can be systemic for some financial actors.”
This is why, she said, at the One Planet summit in Paris last December, the Bank of France launched a network of central banks and supervisors to identify opportunities related to “greening” of the financial system, among other things.
“We should … pool our forces,” Goulard argued. “Fighting against climate change could require $90 trillion in investment through 2030.”