Le Maire Says Broad Wage Hikes Would Hurt French Economy
French Finance Minister Bruno Le Maire said he’s not in favor of a broad boost to wages as such a move would hurt French competitiveness.
Speaking at the Ambrosetti forum in the Italian town of Cernobbio, Le Maire said that a year ago European economies were concerned about rising unemployment and companies collapsing amid the initial pandemic-induced lockdowns.
“Today we’re facing a new concern, which is the consequence of the strong economic recovery, we are facing the lack of workers and the lack of raw materials,” Le Maire said during a media conference on Saturday. Le Maire added that he does not favor a “global approach” to an increase in wages in France as that might “weaken the French competitiveness in some sectors, especially in industrial sectors.”
Policy-makers worldwide are facing the threat of inflation as economies recover from the worst of the coronavirus crisis. Earlier this week, data showed French inflation hit the highest level in almost three years, led by food and energy costs.
French unions and student organizations have called recently for higher salaries and a halt to the closing of some public services. Le Maire did say that targeted wage increases for the hotel and restaurant industries may be warranted amid a dearth of workers.
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In remarks to Bloomberg TV on the sidelines of Saturday’s media conference, Le Maire added that he thinks that the inflationary pressures being felt in France and across the world are “temporary.” His ministry remains “vigilant but we aren’t concerned,” he said.
Separately, Le Maire also urged European Union nations to come together and work to build a stronger bloc able to rival the U.S. and China, particularly by boosting innovation spending. Le Maire stressed in particular the importance of reaching more production autonomy in semi-conductors, tight supply of which is having widespread impacts on various industries, in particular automakers.
“There’s a need to invest more in semi-conductors, to invest in a coordinated manner” between Italy, France and Germany. The effort will need “billions of euros on the table,” he warned.
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