Emmanuel Roman is one of the most senior French people in world finance. This former Goldman Sachs employee is now based in California, where since 2016 he has led Pimco, the largest management company specializing in the bond market in the world, with 1,900 billion dollars (around 1,777 billion euros). ) of outstanding amounts (equivalent to two thirds of French GDP). This specialist in global debts warns of a possible sanction of the markets if the National Rally (RN) comes to power. He also believes that the very rapid rise in debt in the United States “is not sustainable”.
In 2022, you told the “Financial Times” your concern about “seeing 43% of French people vote for a neofascist”. Today, the extreme right is at the gates of power. As the head of one of the largest management companies in the world, how do you see this?
We are witnessing a growth of populist movements throughout the world, in Latin America, in the United States, with a total fracture of the political world, in France too. From a macroeconomic point of view, the real problems in Europe are the high level of debt and inflation. So, politics aside, the only real issue is what to do about the public debt: either increase taxes or cut public spending. Having read the program of the National Rally and their twenty-two points, I can say that there is not a single element of response to the real macroeconomic problems.
Would the arrival of the RN to power risk causing a French debt crisis?
Markets are capable of looking at the longer term. They know that Europe has gone through many ups and downs and has been able to manage complicated situations, like that of Greece, for example. That said, an economic policy that makes no sense is immediately punished by the market. What happened with Liz Truss in England [première ministre britannique en septembre et octobre 2022] is the perfect example. She had tried a different economic policy [en présentant les plus importantes baisses d’impôts depuis les années 1980, laissant filer le déficit]. In the space of a week, it was completely sanctioned by the markets with a movement on the yield curve in England never before experienced.
Can the same thing happen in France?
Markets are very quick to correct any meaningless economic policy, and this is true for any country. However, the difference with the UK is that in Europe we have a central bank [la Banque centrale européenne] who is there to watch over the grain. Because France is within Europe, the danger is therefore relatively low.
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