PARIS (Reuters Breakingviews) - Soon after relocating to Paris I met an entrepreneur with an extraordinary ambition to challenge the technological dominance of Microsoft and Google by creating an alternative digital operating system. I also encountered an angry protester in a yellow vest, or “gilet jaune”, who wanted to overthrow the government. Welcome to the two faces of the global centre of the resistance.
When cars are burning on the Champs-Elysées, it may sound odd for the editor of an English-language financial publication to leave New York to temporarily set up shop in France, bypassing London, Frankfurt and Hong Kong. But Paris is the place to be in 2019. For starters, the task of battling the illiberalism and nativist economic thought that permeates politics in the United States, Britain, Italy and beyond has fallen, through a process of elimination, to the French president.
Whether Emmanuel Macron is up to it will become clear in the coming year. Though riots like those of the “gilets jaunes” are a French tradition, they pose an immediate threat to Macron’s ability to push through more reforms. On Tuesday his government suspended planned increases to fuel taxes, the first major backtrack by Macron after 18 months in office. And the protests may not end here.
There will also be fresh challenges to Gallic capitalism, including the state’s role in guiding industrial policy, as activist investors from New York and London poke around some of the country’s biggest companies. Meantime, Britain’s messy divorce from Europe will hand Paris a golden economic opportunity that is France’s to win or lose.
There are other, more practical, reasons to choose Paris as a base. The time zone is suited to a global operation that stretches across Asia, Europe and the United States. From Paris, it’s possible to speak to colleagues in Singapore or Beijing without spoiling anyone’s dinner before tackling European business, and then pitching in on the New York day. The real challenge is knowing when to back away from the laptop.
It’s also far easier to travel. London is effectively an extension of the Paris Metro – no harder to reach than New Haven is from Manhattan. High-speed trains link the French capital from Amsterdam to Zurich. Air France may have its fiscal woes, but its network is hard to beat. Getting to the Middle East is a cinch, and the jet lag from a trip to China is negligible compared with the 13-hour nightmare accompanying a New York-Shanghai jaunt.
True, other European cities, like Frankfurt, Amsterdam or Brussels offer similar conveniences. And taxes in these countries are less liable to shift significantly when governments change. Yet none can match Paris as a cauldron where industry, finance, media, government and culture comingle. The ability to network across so many spheres makes Paris ideal. And the French bourse has the largest market cap on the continent, with some 850 listed companies, 30 of which rank among world leaders in their industries. This variety and heft is one reason Paris should benefit more than other European capitals from Brexit.
London will continue to be a leading global financial centre, but its current position as the hub for capital flows and information on European finance will weaken no matter how Britain executes its economically foolish split from the EU. Organisations that want to adapt could base more people in Paris to better glean insights into mergers and acquisitions and capital markets transactions. Enticing colleagues over from London for meetings with business leaders is easy from Paris. The offer of a fine French lunch works wonders.
Practical matters aside, I wouldn’t be here if it weren’t for Macron. In February 2017, during his campaign for president, he spoke to people like me tired of the toxicity of public discourse in the era of Donald Trump: “I want all those who today embody innovation and excellence in the United States to hear what we say: from now on, from next May, you will have a new homeland, France.”
Granted, many in France are fed up with him – and not just people wearing yellow vests. Some of the first words I learned in French (it’s a work in progress), were “le président des riches”, taught to me by taxi drivers eager to share their politics. Nobody likes change, including higher fuel levies, especially when foisted upon them by a 40-year-old former Rothschild banker lacking the common touch. Telling an unemployed gardener to go wash dishes, for instance, may be intellectually correct, but goes down like a lead balloon with most voters.
Nonetheless, Macron deserves support for leading the charge against illiberalism and in favour of the multilateralism that has brought stability to the world, whether it’s drumming up pro-EU sentiment ahead of European parliament elections in 2019 or trying to hold together the Paris Agreement on climate change and the Joint Comprehensive Plan of Action with Iran.
At the same time, Macron’s challenge is to steer his country towards the kind of market-friendly policies that have long been anathema to France. That need not mean giving up on cherished benefits like universal healthcare or the right to a decent education. But he will have to work harder to assure the yellow-vested protester from the countryside that paying a bit more at the pump will help safeguard the French way of life for the next generation as well as ensure a cleaner planet.
That also means fostering a flexible labour market where entrepreneurs like Jean-Romain Lhomme, who after a successful career in the City is working with a French engineering team to take on the giants of Silicon Valley, can attract the highest-quality talent on the planet. Leading the resistance isn’t about favouring the rich or the poor, the globetrotting city-dweller or the rooted rural worker, but binding them to a shared pursuit of a common good for the nation, as well as the world. That is today’s biggest challenge, and there’s no better place to watch it unfold than Paris.
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