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Annual General Meeting of the Medef - Wednesday, 3 July 2013

07/03/2013

Speech by Pierre Gattaz, President-elect of the MEDEF

Dear Friends,

This moment, as you can well imagine, is one of particular intensity for me.

You have just entrusted me with defending your businesses.

You have just given me a great signal of the confidence you are placing in me.

I am well aware of the magnitude of the task that awaits me and that awaits us all.

This collective decision demonstrates that the business world in France is a national force, a united force, a force with which the State must reckon and a force on which France can depend.

I naturally want to thank Jean-Claude Volot, Thibaut Lanxade, Patrick Bernasconi and Geoffroy Roux de Bézieux, who like me put themselves forward to stand in this campaign. I know they were motivated by the same sense of service, the same attachment to the spirit of enterprise and the same concern, given France's economic situation.

By agreeing to support my candidacy, they demonstrated a spirit of responsibility and a sense of the general interest.

Throughout this campaign, we have demonstrated that the spirit of competition and competitiveness which motivated us, just as it motivates any entrepreneur, could not in any circumstances be confused with destructive confrontation.

I also want to congratulate Hervé Lambel for his tenacity and his determination: these are required in any candidate, to defend their projects and their values over several long months.

Finally, I would like to offer my heartfelt thanks to Laurence Parisot, to her Executive Board and to the teams of the MEDEF.

Dear Laurence, you have been at the helm throughout the economic storm that has been sweeping our country since 2008. At no time have you taken a back seat. You have defended businesses while injecting a new dynamism and new themes into our Movement.

I therefore propose that we wholeheartedly applaud Laurence and stand in her honour: for her energy and dedication deserve it.
Thank you, Laurence.
The MEDEF, it must be remembered, is, first and foremost an organisation which serves a national cause: that of businesses!


Whether they are industrial, service, sales or construction, established in and around Paris, the regions or overseas, whether they are small, medium or large ... all these businesses are to be found in our Movement and all these businesses have their role to play.

The MEDEF, Mouvement des Entreprises de France (Movement of Enterprises of France), what a beautiful acronym, is the entity that must convey the voice of these fantastic businesses and these admirable entrepreneurs.

I am wont to say that a business is the most important human organisation and the most estimable after that of the family. It is a place of personal development, social integration and human dignity through individual and collective work. But a business is also, I firmly believe, the structure that will help us overcome in the future most of the challenges we are facing.


Because a business carries within it the spirit of initiative, creativity, permanent adaptation, team work and the will to build a better world.

However it needs to be allowed to live and flourish without being held back.

But currently business is under threat in our country.

By saying this, I am not being political, I am not saying that it is the fault of the present Government, or of the previous one.

Because the crisis that our country is going through is not a cyclical one; it is not transient. It is a deep crisis that places us in an unprecedented situation of urgency and which necessarily requires responses which are strong, clear and long-term!

Everyone makes this same observation.

In the past few weeks, I have moved around a lot in the regions and visited the federations. Everywhere, the feeling of the thousands of business people that I have met is the same:

- Our country does not understand its businesses and its business leaders,

- Our country does not like them enough,

- Our country holds them back instead of helping them,

- Our country places more not fewer taxes on them,

- Our country too often crushes rather than encourages them...


"So what?" some might say.


Well, I will quote just one figure: since the beginning of the year, 1,000 more people are becoming unemployed every day. 1,000 people who are losing their jobs every day! It is alarming and unacceptable!

The errors that our politicians have made over the past 30 years are reflected directly in this single figure. It is now exploding right in our faces.

Confronted with this crisis, our country has never had more need of its businesses, because it is they who will be able to make France a winner by helping it to adapt and reform!

France and the French need to be constantly reminded that it is businesses which create employment and wealth in our country. Employment policies should therefore firstly be ones in favour of businesses.

Let us not deceive ourselves: the financing of jobs "aided" by grants is an economic dead-end. The jobs thus created are not sustainable because they do not generate wealth for the country and ultimately increase charges. These aided jobs are paid for by our taxes and not by customers.

For 20 years, every morning, I have asked myself three simple questions: how do I generate growth for my company? How can I make it more competitive? And how can employment be developed in France?

I will ask myself these three questions every morning for my country as part of my mission at the Medef: How can we generate growth in France? How can we make our businesses more competitive? And how can employment be developed in France?

I would like the MEDEF to take ownership of these three questions and use them as a guideline for our action for the next 5 years, because I know that they are shared by all of you business leaders and that these are the three fundamental questions for our country: growth, competitiveness and employment!

When businesses and the spirit of enterprise are in danger, it is our entire joint future which is compromised.

Yes, the situation is serious. We need to make efforts. This will require from us exemplarity, truth and consideration of the human element in the approach we take to issues because our business leader messages are sometimes too dry, too financial and too abstract to strike home.

The opinion polls are very clear: our fellow countrymen want to believe in us, its business leaders, to find solutions to the unemployment problem.

Given this hope, we have a duty to succeed, an obligation of results for our country and for our children.

But we must act without delay.

As I have said, our businesses are being strangled, their hands are tied and they are being terrorised:

- They are being strangled by taxation and social charges that are far too high.

The Gallois report pointed out that there was a gap of 12 margin points between France and the European average. A margin of 28% for French companies against 40% for the EU average and 41% for German companies. This means that our businesses are paying 100 billion euros more in charges and taxes than their European or German counterparts. 100 billion euros!


There are up to 147 taxes imposed on our businesses. And between 2006 and 2012, these taxes increased on average from 8.5% to 12.5% of the Value-Added of businesses: i.e. an erosion of 4 points in 6 years...

- Our businesses are tied up by a legislative and regulatory environment which is becoming more complex every day.
We have 85 codes, including 3 of more than 3,000 pages. Our Labour Code has 3,200 pages and is increasing by 50 to 100 pages per year.

How can you expect the head of a company or even an employee to know their way around?

- Finally, our businesses are being terrorised by a labour code that is over-complex resulting in people being afraid to hire new staff. Too many codes, too many verbose and restricting laws, too many unnecessary and fussy regulations, too much complexity.

If I can borrow a phrase from our friend Xavier Fontanet which seems to me sum up our situation perfectly: "France is a garden overgrown by brambles – regulations –, and covered by large stones – charges and levies."

All of us have become green, all consumers and all unemployed.

None of this can last any longer, must last any longer.

We all say this, on the ground and in our Federations.

I would like today to solemnly propose a "pact of confidence" to the Government, a mutual undertaking between businesses, the social partners and the public authorities.

It is the government's responsibility to construct an economic, legislative and regulatory environment that is favourable to our businesses by lowering our financial charges and by reducing the administrative constraints weighing down our businesses.

This is their responsibility.

It will be the social partners' responsibility to assume, as we do, their responsibility in the face of the crisis by always preferring dialogue on the ground over industrial conflict. Together we must imagine the form of an economic and social contract that is renovated and better adapted to the challenges and changes that globalisation impose on us.

We, the country's entrepreneurs, undertake to construct a future for France that will be a winning one by 2020 with competitive companies generating jobs and young people who are welcomed and integrated into our businesses. Innovative companies, winning international markets, which together all know where they need to go to seek them out and which convey a positive image of France and French know-how.

A pact that we would restore hope and enthusiasm, because then the fertile soil of France, rid of its stones and brambles, would allow our businesses to thrive and prosper.

This pact must take into account the urgent situation in which we find ourselves, but also be forward looking as part of an economic and social dialogue.

I am convinced that with this "Pact of Confidence", we will be able to cut unemployment to under 7%.

There is urgency.

Starting this year, three essential actions need taking:
- Firstly, a transfer over 5 years of 50 billion euros of social charges which are a burden on work to mechanisms such as VAT and CSG (social security levy).

- Secondly, a reduction over 5 years of the compulsory levies of around 50 billion euros in various taxes and fees that weigh on our margins. And here, my message is clear: we will not accept any further increases in compulsory levies, or increases in taxes or levies which weigh heavily on our activities.
We will be told "it is impossible"!

But 100 billion of savings over 5 years is less than 2% of savings per year of a total budget of 1,200 billion. This is what we, businesses, are able to achieve without histrionics when the economic context imposes reforms on us.

- Thirdly, a simplification of the labour code, not to reduce employees' rights but simply to make them workable and understandable for all. I always say that we have three million very small businesses (VSB) and if each of these VSBs hires one person, we will solve the unemployment problem. For example, we were able to come up with the Universal Employment Cheque Service (CESU) for private individuals who wish to hire someone. Why not do the same for VSBs?

Simplify! Simplify!

Starting tomorrow, under the coordination of Jean-François Pilliard and Geoffroy Roux de Bézieux, we will all begin work on making concrete and workable proposals to the Government.

These three urgent measures comprising taxation, competitiveness and simplification, will be grouped together in an initial project that we will call the "Business General Assembly" (Etats Généraux de l’Entreprise), which will be presented and discussed during the MEDEF Summer University in August next, so that these urgent measures can be used to guide the direction of our Movement.

Of course, this "pact" is not directed only at politicians but also at the social partners.

Yes, I believe in reform through collective bargaining. And the success of the National Inter-sectoral Agreement (Accord National Interprofessionnel) of last January showed us that the social partners are able to change the status quo. I also believe that, to reform itself, France first needs collective bargaining that is nearer to the ground, i.e. in the particular business sectors and companies themselves.

Priority to the ground!

I will personally participate in the work and retirement conference opened by the Government. I will put all my energy into shaping a true pension reform based on the lengthening of working life. I also fervently hope for a reform of unemployment insurance and vocational training which our labour market desperately needs.

Besides these, I hope that we can make progress with the social partners on the employability of our personnel. How can we develop the ability of our workers to react and adapt to change and decrease their legitimate fear of unemployment? We need more flexibility to cope with the vagaries of the market, but we have a moral commitment to our employees which consists of training them, supporting them and helping them if need be to find new employment.

To be useful to our country, social dialogue must be based on the reality of the situation.

It must be said and said again: without profits or competitiveness, our businesses are unable to create jobs and even less able to create the wealth required for social solidarity.
I am often asked the question: how will you convince the Government? What are you going to do to get your proposals accepted?
My answer is simple: it is not me who will do so.

It is you. It is all of us.

Because we are 800,000 business leaders who are members of the MEDEF and with the CGPME and the UPA, over 3 million. With our employees, we speak on behalf of 20 million French people.

We are in a survival situation and we can only change our country if we act on the ground. If, all of us, at our level, we go and talk with our elected officials, our employees and ordinary people and explain our proposals, what is at stake and what we want to achieve. And in order to spell out to the French the basic rules of the economy and globalisation.

Yes, I want to mobilise the business leaders, I want them to make their voices heard, I want us to be combative for growth and employment in our country.

We are an army of ambassadors representing the economy and businesses.

Our ability to mobilise on the ground as closely as possible to elected politicians, is indispensable. This will necessarily involve a reform of our movement and new resources allocated to the network. This reform is vital and it will be organised by Patrick Bernasconi.

This second project that we will call the "MEDEF Regional Forum" (Assises Territoriales du MEDEF) will be launched at the Summer University. It will come to fruition in the months afterwards.
But this mobilisation and dealing with these urgencies are not enough to permanently change the situation in our country.

For this, as I have indicated, we need to be given a collective course to steer, an ambition, a common vision and a goal which can give meaning to the efforts and reforms. That is what we are doing in our businesses. This must be done for France, which has been drifting rudderless for 30 years like a cork in the sea, steering no particular course, without an objective, going wherever the winds and currents take it.

This will be the second part of the "Pact of Confidence" that I am proposing to the Government.

This project that I have called France 2020, will be my third project launched this year. Together, we will define a collective vision, the ambition of a France that wins within a strong Europe.

Certainly, France is experiencing difficulties. But it remains the fifth world economic power. It has fantastic strengths, be they in industry, tourism, services, construction, commerce, banking... We can win by meeting two major challenges: inventing the future and equipping half of humanity in the emerging countries who need everything.

We will need boldness and enthusiasm to build this France which will win and regain its optimism, so that our young people come back to our country and once more make us all proud to be French.

I would like us in one year's time to be able to present to our country a consolidated vision of a possible future by 2020, a collective ambition, which could be led by us, by you, where everyone will find their place, look forward and act.
This France 2020 project will present this vision of the future and also describe the legislative, social and regulatory environment which we urgently need to achieve this ambition.

Through this pact of confidence, we need to respond to four challenges that we, the entrepreneurs of this country, will be able to meet if the environment in France is favourable.

The first challenge for us French entrepreneurs is the construction of the future. This will deal with energy, tourism, health, sustainable development, security of goods and people, the digital field, materials, technologies, processes, the management of information,... and many other subjects which are equally opportunities, markets and jobs.

But I would also like the MEDEF to reflect and propose in this context the major backbone of the works and infrastructure which we will be needed in terms of the development of the country: canals, the motorway network, high-speed lines, the high-speed digital networks and intelligent electrical networks...

This work can be performed by the private sector through the contracting out of public services or Public-Private Partnerships.

We must lay out this vision of the future in the short term in a highly operational way by assisting our SMEs and ETIs to set up internationally and with their exports. Because globalisation is our second major challenge and the MEDEF must act on these issues more concretely.

It will obviously not be to duplicate what already exists, but to assist, serve as a link, inject an impetus and simplify. This will be the role of Jean-Claude Volot in my team.

This is a fundamental point for our country: we cannot accept over the long-term a trade balance deficit of around 70 billion euros per year, while the Germans have a surplus of 180 billion.

Similarly, our Movement has a critical role to play in the construction of an economic and social Europe. This is our 3rd challenge: to build Europe. A few days ago, I met my German counterpart in Berlin, Ulrich Grillo, President of the BDI. I will have the pleasure of welcoming him on Friday at the MEDEF's head office.

Our analyses converge and we are going to strengthen our cooperation. Our future is in Europe, a Europe more in phase with our economic concerns, whose action is resolutely designed to take competitiveness into account. A Europe better integrated economically and socially to avoid the effects of "social dumping" that can be seen; a Europe which is no longer used as a scapegoat but one that really brings hope to our fellow citizens.
Yes, our future is in Europe and I believe that the MEDEF must contribute to making this vision credible and understandable.
I thus intend to act, first with our German partners, but also with all the business leaders of the other member countries. It will also necessarily involve a simplification, a reform of our European system and an acceptance of better integration.
We must start this debate, organise ourselves and move forward. Without ever forgetting that it is at the European level that a part of the future of our businesses is played out.


The MEDEF that we all want is also a MEDEF that is enthusiastic and bold. Creative boldness will be the fourth challenge to be raised: to ensure that France again becomes a country of business creators, entrepreneurs, developers and builders over the long-term.
Entrepreneurship means daring to take risks, face uncertainties, not recklessly, but as a discoverer, a builder and a visionary.

I always say that business leaders are heroes.

Ladies and Gentlemen, you are heroes.

Not only because you are building the future, because you are fighting for your employees and for your teams, but because you have dared to try! You have taken risks and you have created jobs in France.

And for this, the country should be profoundly grateful to you.

Therefore I would like the MEDEF to take a lead in this creative boldness which is so often lacking in our country. Not that we are incapable of it, but our whole society encourages us to give up easily which is the start of the decline.

How can people dare in a country which has included the principle of precaution in its constitution? How can people dare in a country that penalises failure without capitalising on the lessons that can be learned from it?

The Americans have the habit of saying: "those who have never failed, have never tried" or again "our scars and sometimes our failures, are our trophies".

The Chinese also have a vision to share with us: in Mandarin, the ideogram "crisis" includes the 2 words "danger" and "opportunity".

They are right. Tomorrow it will be up to us share this idea with all the French. Thibault Lanxade will be responsible for this important project.

Finally, I would like to act according to a logic that brings different organisations and sectors more closely together.

- A bringing together of business leaders by working more closely with the CGPME, UPA and AFEP business federations. We have a lot in common and together we will be more effective in making our voice heard.

- A movement bringing the private and public sectors closer by working with the public sector and not against it.

Yes, we are going to work on the opportunities for reforming the public sector. Yes, we are going to make proposals to reduce its size, because I believe that some functions may be performed by private companies much more effectively.

Never forget that public expenditure in France accounts for 57% of GDP against 45% in Germany and a European average of 50%. And never forget that today's expenditure is tomorrow's taxes and unemployment the day after tomorrow.

Public activity, it ways of working and organisation must be completely overhauled.

Yes, service to users must be improved, by simplifying it and by computerising it and through operational excellence management methods...

In a word, by making public servants' jobs more interesting.

People often say to me: "How do you expect to reduce expenditure in public services without affecting the quality of the services"? My answer is simple, this is what we do in businesses: "Ask the question to people who see wastage: to the nurses in the hospitals, the clerks in the government offices, the local authority workers in the local communities...".

They know a lot. They know where to find savings and would like to be able to propose solutions. This is what is called participative management, operational excellence or lean management. And these modern management methods are widely used in all businesses in the private sector.

Why not also get inspiration from the reforms carried out in countries close to us such as Canada which has managed to lower its public expenditure by 10% in three years?
The French are ready for the change, they are even asking for it.

I also want the MEDEF to continue to make business better known to all the French, to promote it and to explain it. Businesses are places of integration, development, training and human fulfilment.

Currently, businesses are still misunderstood in our country. Examples abound, but I will mention only the most recent which is a striking example of what I mean. My youngest daughter has just taken her baccalaureate (and will I hope pass it). Her exam question in Economic and Social Sciences was "Show how industrial conflicts can be factors of social cohesion...".

As if, in our country, cohesion necessarily involves conflict with the business leader! How in the twenty-first century can we still have a vision of this kind that is so stereotypical and dogmatic and so far removed from the reality?

In my opinion, it is evidence of a collective failure. Here too, we need to resume our action in this field, in a resolute way and open up our businesses to young people and teachers and show and explain to them, to be tenacious in our action and exemplary in our approach. The French need to understand the economy.

To restore their taste for effort, the desire to build over the long-term, with tenacity. Much remains to be done and we, the business leaders, have a historic responsibility in respect to this issue.

The programme is ambitious, but highly motivating.

The profound crisis that our country has faced in the past 5 years has placed us in a situation of urgency that requires courage, determination and vision.

It is our businesses which innovate, which imagine and then make a reality of what life will be for everyone tomorrow.

It is our businesses which proudly bear the colours of France in the world and invent the future.

To everyone, we ask you to be courageous:
- To the Government, to carry out the essential reforms.
- To our employees, to understand and accept them.
- To the business leaders, to implement them and regain confidence and dynamism to create growth and jobs for our country.

The MEDEF has a key role to play in achieving this. The objective for me is that our Movement is useful to its members, to the businesses and therefore to our country.

The MEDEF must ensure that all France's businesses are winners. It must get the French to appreciate their businesses, to reconcile the economy and social spheres and make France once again a country that is attractive, dynamic and prosperous.


To you, the President of the Republic, I ask you to pledge your support for business;
Put your trust in businesses and business leaders.

And France will recover and will win.

Thanks to you and with us all, our businesses will become winners and the winner too will be France.

Thank you.

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