French President Emmanuel Macron

TAKEAWAY: FRENCH PRESIDENT EMMANUEL MACRON

AUDIENCE MEMBER:
He has a post about attending an international CEO conference in France with President [Emmanuel] Macron and feeling like there’s a new day dawning in France. So maybe could you explain that a little bit?

BLANKFEIN: 
Well, Macron­—you know, I really do think right now—and again, we’ll have to see how things evolve further. But right now the most important—the central leader in Europe right now is Macron, because [German Chancellor Angela] Mrs. Merkel, who’s a fabulous politician and has been for 10 years the center and the most influential person in Europe—and maybe, you’d say, the greatest statesman in the world for some of this period—is weakened by having a weak coalition, whereas Macron got into government in a tsunami of support and controls his legislature. Now the question in Paris is also, Will he get cold feet? Will he see it through? But he has such an—his predecessors didn’t, even though they had a bit of a mandate, but got cold feet the first time they set the trucks on fire in the middle of the road.

France is France, so I don’t have any illusions about how difficult it is for change in that country. But this could be—he’s not like a Thatcher or a Reagan. He may be like a [former German Chancellor Gerhard] Schröder in Germany—he was a socialist but who changed. It’s hard to remember, but we know that Germany is this huge economic power. But if you think back 25 years, which is hard to do—but some of us are old enough to have read newspapers 25 years ago—remember that Germany—the book on Germany was it was going downhill.  The first two generations after the war were killing themselves, worked hard. But after the ’80s, remember the depression and the morass people sunk into—Baader-Meinhof, all the socialism that crept across Germany. All of a sudden, it didn’t look good. It was bad. And Schröder, who—you know, I don’t think he’s had a great afterlife in terms of what he’s doing now, but at the time, he reset that in Germany, and he got rid of—you know, they were going the way of France—short work weeks, unions controlling companies and everything. That kind of was reversed in a way that [former British Prime Minister Margaret] Thatcher played that role—again, different people—and [former President Ronald] Reagan.

People want to see this, and so sometimes you see what you want to see, even if it’s not there. But I think it’s there. And I’ve spent—I was at that meeting in Versailles and I talked to him, and I met with him before. I knew him from—not friendly-friendly or know him, but I had met with him before he got into government. And I think he has the potential to be a real deal. He can either do it or we’ll be disappointed, but I’d say that this is a moment in time where he seems to be on the right track. And the people he has in his government are like that too. The first thing you say—is this just dependent on him, and if he’s gone, will it stick? I asked him that question. He said, if it works, it will stick. If it doesn’t work, it won’t. Which is the right answer. None of this, oh, of course it will stick, a new day has dawned—like that. And his approval rating is in the—but we’ll see. We’re watching him.

In parallel to that is a little bit what’s happening in Japan, where [Prime Minister Shinzo] Abe has been—I mean, you used to have a different prime minister in Japan—more than one a year, and he’s been there for a few years now. He came in with a mandate. Now, it’s kind of a little bit uncertain how much further he can go. Everybody gets unpopular after a few years anyway.

So, I think the lesson is if [Macron] he’s going to do it, he better do this stuff soon, while he has his mandate, and rip the bandage off really quickly. But if you ask me whether I still have the optimism I tried to convey there—yes, just that the stakes are higher now because he’s more influential now, and he has a bigger percentage of the pool of leadership influence in Europe because of the weakening of Mrs. Merkel.