Inside Macron’s Pitch Meeting with Wall Street Amid Mounting Budget Woes

By Nupur Anand and Michel Rose

NEW YORK/PARIS – French President Emmanuel Macron has provided key U.S. financiers with an honest overview of France’s economic difficulties, highlighting the possibility of upcoming tax increases as part of efforts to address the nation’s significant deficit.

Macron, a former investment banker, convened over a dozen Wall Street executives in New York during last month’s U.N. General Assembly, with the intent to reassure them regarding France’s declining fiscal situation. According to three sources who attended, this meeting lasted over an hour and included prominent financiers like Goldman Sachs President John Waldron and Blackstone CEO Stephen Schwarzman.

During the discussions, Macron acknowledged the likelihood of raising taxes to support the country’s budget, according to one attendee who requested to remain anonymous due to the meeting’s confidential nature. He was also transparent about the economic hurdles France is facing.

Macron promoted France as a viable investment opportunity and explored ways to encourage multinational companies to expand their operations in the country. His familiarity with the assembly of bankers stemmed from his previous "Choose France" summits, which aimed to reshape perceptions of France as a dynamic, pro-business environment rather than a burdensome, high-tax nation.

The meeting took place on September 24, as Macron’s new minority government began negotiations on a budget to manage a deficit that could exceed 6% this year, leading to speculation about potential tax increases.

This gathering followed a similar one held during the Paris Olympics this summer. Macron indicated that Europe’s economic slowdown necessitates a focus on consolidating public finances, potentially through targeted and temporary tax increases. This approach would represent a shift for France, which had previously reduced taxes for large corporations under Macron’s administration. He urged investors not to overly react to any tax hikes, emphasizing his primary goal of decreasing government spending.

Approximately 50% of France’s government debt is held by foreign investors, a substantially higher percentage than in other eurozone nations such as Italy, Spain, and Germany. Following the summer elections, where no party gained a majority, Macron’s aides noted that he has been particularly attentive to maintaining France’s credibility with investors.

Despite rising concerns among investors, evidenced by French borrowing costs surpassing those of Spain, Macron refrained from making commitments during the meeting. The president is actively engaging with business leaders to foster confidence in France’s economic management.

This meeting preceded an announcement by Prime Minister Michel Barnier regarding plans to reduce the deficit to 5% by 2025, primarily through spending cuts and some temporary tax increases on large corporations and wealthy individuals.

Barnier’s budget minister has indicated a substantial cost-cutting initiative expected to save around 60 billion euros next year. Additionally, Macron touched on topics such as artificial intelligence, nuclear energy, and regulatory frameworks during the discussions.