Can Europe Remain the Protagonist of its Future with Bruno Le Maire

Tonya Bakritzes: Who actually makes decisions in today’s world? That’s the question at the heart of Bruno Le Maire’s latest book, and his answer is unsettling: power has shifted from governments to big tech, finance, and leaders who decide alone.  

In this episode, Le Maire, France’s longest-serving modern finance minister, sits down with S2G’s Sanjeev Krishnan, and Frédéric Michel, former chief strategy and communications advisor to Emmanuel Macron, to discuss this reality and the crossroads Europe now faces. How does a region built on consensus compete with powers built on speed? 

Few people distill complex politics this clearly. And while the message is urgent, the vision is an optimistic one: a Europe that is more agile and focused, without losing the culture that makes it worth preserving.

We’ve spent a lot of time on this show exploring how the five transitions are reshaping the US. This is an illuminating look at how they’re landing in Europe.

And please stay tuned for important disclosures at the end of this episode.

Frédéric Michel: Thank you for being with us, Bruno. This is great. We’re delighted to have you with us. And needless to say, we have a lot of topics to cover today. So can I start by just exploring something with you before we go into all our all our topics? You spent twenty five years, I think, in French and European politics. You’ve been, you know, chief of staff of a Prime Minister, agriculture minister. I think you’ve been the longest serving finance minister in modern French political history. I think seven years finance minister. 

And your new book which is le temps d’une décision, which is here, distills a lot into one simple question when it comes to decisions that shape people’s lives, decisions about the price of money, about the direction of technology, about war and peace, who actually really decides? And I’d love to start this with the simple question of the central thesis of your book. What is the the thesis of it and also what’s the answer that you’ve you’ve managed to land with? Where’s the decision?

Bruno Le Maire: Well quite a difficult question, but thank you for the invitation first, and I will try to respond as clearly as possible to your key question. I think that we must understand that the decision-making process has shifted from governments, nation-states, to the big tech players, and to finance. I would not say that the governments do not have any power anymore in their hands, I would say that it becomes more and more difficult for small or middle-sized nation states like the European member states to keep the decision-making process in their hands. Because they have to do with new players, China, of course, the US, the tech players, and the big finance that do really have the decision-making process in their hands. So either we are aware of that and we take the appropriate decisions to keep a room of maneuver for the head of states in Europe, or we would have the decision-making process shifting from Europe to both China and the US.

Frédéric Michel: Thank you. And do you have a specific moment or event that for you symbolizes that shift? Is there something in the last few years that for you really characterizes this major change?

Bruno Le Maire: I would just give one single example, is the decision by Elon Musk to cut the access of Russia to the Starlink message. Because it was the first time in the recent history where it became very clear that a big tech player was in a position to take political decisions at the same level as the head of states.

And the conclusion of that is that either the EU is able to have its own Starlink system and to have low-orbite satellites which could face the competition with Starlink, or we will be in the hands of Elon Musk and Starlink, including for certain decisions like launching rockets or decisions on the battlefield. So to me, it was really very clear at that very specific moment that Elon Musk had the same kind of power as Xi Jinping or Donald Trump.

Sanjeev Krishnan: I think one of the things we’re doing at S2G, and thank you for joining us, is building our firm on sort of five structural transitions we think the world’s going through at once. So shorthand sort of CPU to GPU, i.e. AI. Two from a unipolar world to a multipolar world, i.e., geopolitics. I think from a declining cost of money to an unknown price of money. Four from sort of one point five degree warming to potentially two point five or higher, and then four from a demographic dividend to an aging population.

Would love to have a European perspective on that today, just given to date we’ve largely talked about those five forces with an American lens, but I think Europe is actually equally compelling, if not more, in terms of what we call this age of adaptation, these five forces. And perhaps maybe, you know, to start on the geopolitics power side.

Bruno Le Maire: Well, I would say that those changes happen not every two decades or every five decades, but every two or three centuries. And we must really be aware of the radicality of the changes that we will have to face in the next decades and about the consequences of those changes on our daily life and on the public policies that must be implemented. Just to give you some very short and clear examples. The fact that we have an aging society and that the demographic trend in France radically changed over the past two decades just makes our social system or welfare state unsustainable for the decades to come. Now, everybody is asking for radical changes in the pension system, but the truth is that we do not have the choice because we do not have the same demography and we don’t have young people, the number of young people that would be required just to fund the current system as it stands. 

Changes in demography means the end of the welfare state as it stands. The fact that we are facing an acceleration on warming just obliged the government and all the public powers to take drastic decisions and radical decisions that would be very costly. And you will need a lot of money just to adapt to a speed of warming not only in France but in every European member state. On AI, the choice is very clear. Either in the next decade, you have one single European hyperscaler and you can face the competition with China or the US. I’m not pretending that we will be at the same level as China or the US because I think it is too late and we will never catch up. But there is still the possibility for Europe to have one single hyperscaler proposing solutions for private companies or for public governments. But we have less than a couple of years to take the appropriate decisions to have one single European player facing the competition with Google, Amazon, Facebook, or DeepSeek and the Chinese players. 

So my conclusion is that we are clearly at the crossroads. Either we are aware that we are facing changes that happen every two centuries and we take the appropriate decisions. And in that case, there is still the possibility for Europe to remain relevant in the 21^st century. Or we do not take the right decisions and the appropriate decisions and we build on the status quo. And in that case, this is the end of Europe in the 21^st century.

Frédéric Michel: Does that mean, given you’ve witnessed a very strong radical attempt to reform pension, does that mean democracies can’t make those radical reforms anymore? I mean do you have a sense that the system as it is now institutionally is not adapted to be able to go towards those radical reforms? And pension is a very good example.

Bruno Le Maire: Pension is a very good example. I think, because I’m quite optimistic and I think that there remains a lot of possibilities for France or for European countries, but you cannot convince the European people or the French people to move in one direction if they do not see any benefit in moving in that direction. Now, if you are just explaining, well, we need a pension reform because we do not have any other choice and we are under financial pressure, then I think that you will never get the support of 50 % of the public opinion. If you are explaining that this is a choice that will make the life of retired people better, because they will earn better pensions thanks to the capitalization system, in that case there is the possibility of convincing more than 50 % of the French population to move on and to adapt the current system to the demography as it stands. 

But once again, you need to put the evidence on the table that your reform will make things better and not worse.

Frédéric Michel: So reforms in Europe, as Sanjeev mentioned, you’ve been in the room with President Trump, President Putin, Prime Xi. I remember we were together in China once for those meetings. After all those meetings, including G20 and European Council, you’ve done so many, do you have some experiences that teach you how power is actually exercised. Do you think Europe is still united and can still be a decider in the global conversations?

Bruno Le Maire:I think it might be a possibility for Europe, but not on the current political pattern. I mean, if we stick to Europe as it stands, with 27 member states deciding all together for small things and big things, one commission, one parliament, a president of the commission, a president of the parliament, a president of the council, head of states, prime ministers, all together trying to bridge the gap between the different positions and to build a consensus, this is a waste of time. And you will never see Europe as a relevant power in the 21^st century. 

So my proposal is to move away from that European construction, which is not relevant anymore and not efficient anymore, to adopt what I call a federation of six member states, France, Germany, Italy, Spain, Poland, and the Netherlands. Those six member states could decide that on very specific topics or very specific policies and sectors, they would decide all together not taking into account the position of the 21 other member states on chips, on AI, on the capital market union, maybe on defense, maybe on the protection of borders, maybe on universities, they could take very strong decisions and explain well, when we are moving very fast all together, not taking into account the difference of positions of all the member states, you can get some very concrete results. So to me, that’s the single way for Europe to remain relevant in the 21^st century. 

You just referred, Frédéric, to meetings with Donald Trump. I remember a meeting in the Oval Office with Donald Trump the day he decided to hit France with tariffs on the French ones, which of course was very detrimental for the French economy. So he was the single one to decide. And the response that we could give to the decision from Donald Trump had to be decided by 27 member states with different economic interests, plus the Commission, plus the Parliament. So the decision never came on the table. We have to be aware of that. On the one side, you have Donald Trump, Xi Jinping, Vladimir Putin, and Erdogan alone. On the other side, you have a mix of different governments, different institutions, different powers. You must get rid of that.

You must simplify the decision-making process in Europe. You must be more rapid, more aggressive, tougher if you want to remain relevant in the 21^st century.

Sanjeev Krishnan: I’m reminded, you know, they say a camel is a horse by committee.

Bruno Le Maire: That’s a good sentence.

Sanjeev Krishnan: And you know, I think what you’re really changing as you sort of think about power migrating from governments to finance and to technology, it’s a function of can democracy work. It’s a function of how do we get democracy to be upgraded to the twenty first century power architecture. Is that what I’m hearing?

Bruno Le Maire: Yes, I strongly believe that democracy can work provided that democracies change. And the problem is that you have big changes in the world organization, in the multipolar world. You have China rising at a pace which is absolutely fascinating. You have new powers on the international stage.

And nothing changed in the organization of democracies in Europe. Just to give you one single example, a large part of power moved away from the national government to the European Commission and to the European level. That’s a choice that was made by all the member states. Fine. You should have less ministers at the national level than more ministers than before.

But the truth is that you have more ministers than you had before, even if power has moved away from the national level to the European level.

So either we are aware of that and you introduce radical changes in the organization of the national power, 10 ministers and not 48. One prime minister who is responsible for the implementation of the national policy and not the prime minister and the president.

The Assemble Nationale which would be responsible for control and not for adopting new laws every two weeks or new rules or new norms every two weeks. All the sectors that are in the hands of the Commission are not in the hands of the national level anymore. Trade, for instance. And in that case, you will have something which is quite efficient and you can face the competition with the big powers. Or you stick to the same organization and this organization is not efficient and not relevant anymore and will fail.

Sanjeev Krishnan: We could talk about each of these forces, I think, for hours, but in the interest of time, I do want to get to sort of the price of money because you’ve spent a lot of time in that world. And as you think about power migrating from governments to finance and technology, this podcast has a lot of audience in the investor class and and the capital allocator class. What would your message to them be at the moment? Particularly from a European lens.

Bruno Le Maire: Well, my message would be be cautious. Because I’m really very much concerned about the current situation of public finances in many European member states, starting with, unfortunately, France. When you are looking at the level of interest rates for the French bonds, for the 10 years bonds, it went up from 3 % to 3.5% to more than 4.1%, which means that the price of the interest rates on the price of debt will raise from 55 to 60 billion euros a year to more than 100 billion a year, no later than 2029. 

At some point, you could have one investor saying, well, enough is enough and I don’t want to pay for the French debt. The risk is too big. The risk of failure is too big. So I’m not asking to have an interest rate raising to 4.5 or 5%. I just refuse to pay for the French debt. And in that case, you will have to ask the ECB to take the lead and to pay instead of the private investors.

And this could be the beginning of very big difficulties, not only for France, but for the Eurozone as a whole. That’s exactly what we must avoid. Not in the coming years, not in the coming month, but in the coming weeks. The fact that we decided to get rid of the pension system reform is a very negative signal for the market. The fact that we are not able to introduce any kind of cut in the public expenses is a second very negative signal for the market. So either we stand ready in the coming weeks for the next budget 2027 to introduce some very strong decisions and there is a sense of responsibility arising from the French parliament that will take the necessary decisions to avoid any kind of financial crisis. Or my assessment is that in the coming weeks or in the coming month, we could face some strong difficulties in France.

Sanjeev Krishnan: By the way, this has happened globally, but you know, the bond market, it’s been difficult for them to regulate public finance. I mean, because of central banks globally, really with leading with America post the great financial crisis and not wanting to take the pain

to citizens of some of these tough decisions. Do you feel like what’s happening literally last week, the week before in America, the 30 year and the 10 year is at, you know, sort of historic or not historic levels, but in twenty, twenty five year levels. Japan. This seems like a global phenomenon. Is it sort of the revenge of the bond market? And and this time central banks may not have the same sort of flexibility or license to do what they did in ​‘08, ​‘09.

Bruno Le Maire: I totally share that point of view and we need to have a global view on the bond market. When you are looking at the French situation, the French situation is bad, as I just explained. But just look at the German situation. The German situation does not look so good, either. The level of interest rates went up from 2.5 % to more than 3%, which is something radically new in Germany.

The same in the US, you just mentioned the figures. So the conclusion to that is that the central banks do not have the same power as they used to have before, which is not good news for us because it is the same pattern and the same long-term evolution where the public powers and the public policies do not have the same leverages as they did a few years or a few decades before.

Frédéric Michel: You mentioned the Franco-German relationship. I think if I’m right, you have some thoughts that I’ve looked at on how we that relationship could be reformed and you still put it at the core of how Europe should be driven. Can you expand on what you think should be the next step for that relationship to function better and to be more effective and influential?

Bruno Le Maire: The current situation is quite clear. France and Germany are moving away from each. Then comes the decision. Either you believe that this is a fact and there is nothing to do that could improve the situation and you try to build some new alliances and cooperations with either Italy or Spain or the UK.

Many French presidents and many French governments tried to go that way and it always led to a total failure because the European construction is based on a very strong and very tough relationship between France and Germany. So to me the right decision that must be taken is to look at the difficulties and try to fix them. We have some key difficulties that must be fixed between the next French president and the German chancellor. The first one is the question of public finances. You cannot have a cooperation between two countries when in one country you have a level of public debt, which is more than 117 % of the French GDP.

And in Germany, have a level of public debt that is under 65% of the German GDP. So you must give a guarantee to the German chancellor that you will fix that issue and that you will take the required decisions to reduce the level of public debt and come back to some public finances. 

The second point that you must fix is energy. You must make very clear to the German Chancellor and the German government, that nuclear energy is something which is at the core of the French sovereignty and that nothing can be disputed about French nuclear energy. And by the way, there is a need for the German industry to get access to the French nuclear energy. Of course, the German industry is much welcome. 

The third question which is absolutely key, is defense. Germany has decided to spend more than $100 billion euros a year on defense. On one side, it is quite good news for the enforcement of the European defense, but on the other side, it raises a lot of concern among many European member states that do not see very positively the fact that Germany is becoming a military power for the second time in the German history. So you must address that question too, for the sake of having more integration between the two countries and more sovereignty for Europe. So to me, the conclusion of the current situation is not we have to move away from Germany. On the contrary, you need to build new bridges between France and Germany, fix the issues and set the tone for the next decades.

Sanjeev Krishnan: Again, we could keep going on all these topics, but I do want to get to what we in America sort of say nonverb adjective AI, because that’s all American capital markets want to talk about. It’s central to your book. You’ve already mentioned it today in your podcast, sort of this rallying cry around a European champion, European hyperscaler. And the industrial logic and the strategic logic makes a lot of sense. How do you think about bringing that to execution and bringing it to life?

Bruno Le Maire: Well, first of all, it is absolutely key because we are at a time where big players are the winners. So we must get rid of that foolish idea that is floating in the air in the European Commission and in Brussels. That big is not beautiful and small is beautiful. I really think that we are at a time where big investments are required for AI, for chips, for semiconductors, for getting access to disruptive technologies.

And if you need money, you need big players. So you must have big European players to catch up with China and with the US. If you want to implement that policy, you need to set three conditions and you need to fulfill three conditions. The first one is a change in the competition rules. On the basis of the current competition rules, you cannot build big European players. You know, when I was in charge of the French economy, I tried to accelerate the merger between Siemens and Alstom. And I still believe that it was a very good idea because we would have the most significant railway company in the world. The commission decided that it was totally impossible, that it was not consistent with the competition rules in Europe. So it failed.

And we failed. And the result of that is that the first big player is a Chinese one, not a European one. So first condition that must be fulfilled is a change in the competition rules. The second one is the one that you just mentioned, which is finance. Money is the key. If you want to have big players, you need big money. If you want to get access to big money, you need to put in place as soon as possible the capital market union.

Since it proved to be impossible to build that capital market union with the 27 member states and the 27 players, because there were so many hurdles in the way to this capital market union, my proposal would be to build and to start the capital market union with two, three, four, five players, and then to give the incentive for the other players to join. But we need to have that capital market union as soon as possible being implemented because you need to raise a lot of money for big tech companies, for chips, for AI and so on. And the third condition, which is quite difficult to be fulfilled because it hurts some very strong beliefs in the European Commission and European construction, is to put in place a new trade policy explaining that there will be a European preference to European League players.

European big players won’t be sustainable if there are no off-tech commitments by these players on the basis of new European rules, obliging the European industry and the European companies to buy European devices. I’ll just give the example of semiconductors and chips because I think it is the most relevant one. If you want to have a chips industry

which can really face a competition with China and the US, you need to put on the table at least $100 billion euros a year. That’s a lot of money. So you need the capital market union. But you also need to have some big initial players like Siemens or BMW or Airbus taking off-take commitments so that this investment would be sustainable and would give some positive results. So you need to change the rules of competition. You need to have the capital market union being implemented and you need to have a new trade policy. By the way, I just want to recall, even if he’s not a very good friend of Europe, a sentence by Peter Thiel at the conference he gave to Stanford, I think, which was, competition is for losers. I would not say that. I would say that big players are for winners.

Sanjeev Krishnan: Yeah, and and  I think we’ve had and this is my personal opinion, and I think the left and the right are increasingly diagnosing it this way.

We have a form of capitalism in America where we’ve socialized losses and privatized gains. See mortgage backed securities, see a lot of the market concentration. But the privatizing of gains has accrued to a set of concentrated players that are global. And so if you’re going to regulate externalities, that’s totally fine. But you have to also look at the other side of the coin around if you have privatized gains, how it’s all accruing to the Americans and the Chinese,

Especially in a mode of technology like AI, you know, be careful.

Bruno Le Maire: No, I totally agree. But you know, we have to move step by step. The first step for Europe is to have big players. Because if you do not have big players, you do not have access to the new prosperity, which will be based on tech, AI and semiconductors. So I don’t want to have a Europe that will not get access to those technologies and to that kind of prosperity.

But the next step, and I totally agree with what you just said, the next step is to ensure that these gains will be shared among all the population and will not be captured by the big players. This is the issue.

Sanjeev Krishnan: I think that’s right. I think the other thing that I’ve been looking at general purpose technology the last 300 years and from invention to productivity, is that there’s always a lag. Steam engine, railroads, electricity, ICE engines, computing. I do think that I will push for the second owner and third owner strategy. So I don’t think it’s too late because I think while it’s twenty percent investment grade credit in America and thirty five percent S&P, there’s gonna be a crash. It happened in the railroads, in any of your general purpose technologies, there’s a crash. So I do feel like it’s not too late. Especially with the second order, third order dynamic that will occur with these assets.

Bruno Le Maire: I’m very cautious because I would really not like having Europe getting rid of any kind of ambition in new technologies, in chips, in electric car batteries, in the autonomous car, explaining, well, there will be a crash, spending too much money on those technologies. I think that we must really catch up.

I think that we have the possibility of catching up on some very specific technologies if we are able to make very clear choices and if we stand together.

Sanjeev Krishnan: We’ve talked about climate and aging, but I do want to end with a central point in your book that that you just mentioned, which is that power has drifted to a handful of agents within the economy, finance, technology, perhaps others. In America there is this populism that’s occurring on the left and the right. I had always thought American politics was about population density, you know, urban rural. But I’m increasingly seeing it as we have a K‑shaped economy and market concentration increases, that there’s more and more this notion of concentration of power, money, market share and that’s causing rifts across the political spectrums. How are you seeing it in Europe?

Bruno Le Maire: I see exactly the same process and I’m really worried by the way Europe is shifting to the far-right parties everywhere in Europe. Just look at Italy, not to talk about France. In Italy, they have Meloni. Meloni used to be criticized because she came from the far right. But the truth is that now you have a new party which is at the right of the far right. In Germany, exactly the same. You have the CDU, the Conservative Party, and you have the AFD, getting more and more voters, becoming the first party in Germany, and making very clear reference to the Nazi period.

So this is a matter of huge concern for me. First of all, we have to understand why we are facing this wave of new populist parties everywhere in Europe. And to me, the lack of decision and the lack of results are the first reason why populist parties are gaining more and more power. You know, the two promises of European construction were peace and prosperity. Now we have war and poverty. So either we take the right decisions to ensure the population that they will be secured and they will not be threatened neither by Russia or by Iran or by any kind of new threats. And then you can reduce the influence of the far-right parties.

Either we stand ready to take very strong decisions to face the challenge of illegal migrations. Either we stand ready to take very strong decisions to change the economic model, to get some more prosperity, to get access to AI and to improve the level of productivity everywhere in Europe. And in that case, you will come back to peace and prosperity. Believe me this will be the end of the populist parties. But if we do not take very strong and very radical decisions, you will have many European member states shifting to extremist parties.

Frédéric Michel: I wanted to try to end on an optimistic reason why Europe can still believe that it has an ability to change this trajectory, and you have sort of given us some hope about that ability. But I thought the conversation was really good around how reform needs to be implemented both domestically and at the European level. There’s one issue that we wanted to tackle is the issue of decarbonisation, climate, and to know whether Europe still has a chance to be an industrial franchise in that area. Whether, you know, you thought Europe has a lot of potential in that domain, do you still believe that it can lead the way in this sector?

Bruno Le Maire: I think that China could be a good example. I’m a little bit provocative by making that reference to China, but the fact is that the country which is the most successful in the transition to a green industry is China. China is building two new nuclear plants every year. China has taken the lead on rare earth materials and has taken the lead on EVs. So we should do exactly the same to have a plan to stick to the plan and to explain that the green industry is the future of Europe. The fact that we have radical changes could be perceived as a threat, but to me, it is the biggest opportunity for Europe to catch up. But we must stick to a very clear strategy. Green industry, new technologies, and the fight against climate change.

These must be the three patterns on which we must build the new European model. And by the way, I remain optimistic for one single reason, which is that the place to be, the place where you can live your best life, to me, it’s Europe. I really prefer to live in Europe, rather than living in China or in the US. I like the US, I like China, but I prefer to live in Europe because there is a culture, there is a sense of beauty.

There is a respect for diversity. You have liberal democracies. And we must preserve this European culture. But you cannot preserve that European culture without having a successful economic model. And the key challenge for us now is to try to put together on the one side a successful and productive economic model, and on the other side, the fight against climate change. And the solution to that, to me, is the green industry, the tech solutions, and the way of more innovation and more disruptive technologies everywhere in Europe.

Sanjeev Krishnan: You know, I remain convinced of the same optimism for Europe. I mean, if you look at the two great powers at the moment, one is hyper individualism that it’s going to a K‑shaped economy. The other one is a collectivist, you know, sort of bureau driven, effective economy. And I think Europe can sort of marry the best of collectivism with the best of individualism into the twenty-first century. So thank you again for joining us. I remain as optimistic as you about the opportunities in Europe.

Bruno Le Maire: Thank you so much, Sanjeev. I share your point of view. Thank you, Frédéric, and have a good day. Thank you.

Frédéric Michel: Thank you, Bruno. Thank you very much. 

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