Now that he is no longer in government, Gérald Darmanin is overflowing with imagination to get the public accounts back on track. Reform public broadcasting, eliminate a public holiday, sound the death knell for the 35-hour week in the private sector, make foreign students pay more for their registration fees… The former Minister of the Interior said in an interview with the newspaper Les Echos his many proposals. He thus concludes his catalog of recommendations: “Work must be carried out on State participations in companies. The State has participations valued at 150 billion euros, including 50 billion in listed companies like Orange, the FDJ, Stellantis or Engie It would be better to sell these stakes than to increase corporate tax. The State has nothing to do there.
The deputy from the North brings back into the debate a subject which had gone out of fashion. Selling off the family jewels, is that reasonable? For the essayist Maroun Eddé, author of The Destruction of the State (Bouquins, 2023), this reflects a “purely financial and short-term logic”. Not necessarily very inspired if we take a step back.
L’Express: Are you surprised to see this debate resurface around the advisability of selling state holdings?
Maroun Eddé: For more than thirty years, the sale State participation in companies has been a means of generating budgetary revenue. It’s a cliché that comes up quite often, coming from both the right and the left. At the turn of the 1990s, there was agreement on the issue. The left did not question the plan to sell these titles, but it accused the right of selling off the jewels of the State. The debate therefore mainly focused on the selling price. The subject has been taken up less recently, probably because the portfolio is already very reduced compared to that time. Twenty years ago, the French state held a veritable war chest. The ancestor of the State Participation Agency (APE) was a very powerful institution, which notably owned all the highways, all the airports, telecom companies and even banks.
Gérald Darmanin cites State participation (via the APE) and companies owned by Bpifrance, such as Stellantis. Is the logic between these two institutions different?
At Bpifrance, there is real intentionality. It invests strategically in sectors determined, depending on the politics of the moment, by its general director or by the President of the Republic himself. The APE portfolio is rather a legacy of historical positions of the State, over which it still has a right of review, but without a policy associated with the State shareholder.
Furthermore, the APE played a very important role in the sale of state assets, which has sometimes attracted criticism, such as during the sale of Alstom in 2014. It is a fairly weakened institution and who no longer has much power. Its few large holdings, like EDF for example, are very autonomous. And if there is a subject to be managed, it goes directly through the President of the Republic.
Does the state shareholder still have a reason to exist?
For certain companies, like Renault, nationalized after the war, this no longer makes much sense today. Moreover, the fact that the State was present in its capital probably did not lead to very good decisions and also accelerated differences with the Japanese.
But Gérald Darmanin cites a jumble of companies from the automobile, energy and telecoms sectors. This reflects a logic on his part that is quite dangerous because it is purely financial and short-term, without a strategic vision. The State cannot and must not be everywhere. But there are areas where he needs to be.
In the past, other governments have chosen privatization…
Yes, this is how Elf Aquitaine and then Total were entirely privatized during the 1990s, mainly to fill budget deficits. This is short-termism, because this way we settle the budget for the year by generating significant revenue at once. But in the long term, the loss is considerable. One of these two companies was released in 1995 at a valuation of 80 billion francs. But today, TotalEnergies [NDLR : qui comprend les deux sociétés] brings in 20 billion euros in profits per year. Likewise, the motorways were sold in 2006 to bring 14.8 billion euros into the state coffers, whereas today they bring in more than 4 billion in profits per year… The danger comes from the fact that the government estimates that it will be judged in six months, a year, and is satisfied with this immediate new money, which eases the financial pressure. But over 30 years, the shortfall is terrible for France.
The companies cited here by Gérald Darmanin generate several billion euros in net profit. For the State, these are profitable investments. He doesn’t lose by being there, quite the contrary. The problem is that the State is often a bad negotiator, particularly in relation to private funds and financial markets. Do we really want to sell assets at a generally discounted price because the State’s negotiating capacity is weak, even though these investments are profitable?
“The State has nothing to do there,” says Gérald Darmanin. What do you think?
It depends on the cases. It is clear that there are sectors where the State should not intervene, others where it should. The real problem is the lack of a real strategy as a shareholder. Apart from Bpifrance’s holdings, these are often past remainders, owned in a fairly passive manner. However, the fact of being present in capital can allow it to act, in the name of the general interest, in sectors as strategic as telecoms or energy. Let’s take the example of Total-Elf again: at the time when the State sold its shares, environmental issues were less taken into consideration. Twenty years later, we can bite our fingers, for obvious financial reasons as I said, but also because, if the company had remained in public ownership, the State would have had leverage for action in the energy transition, which today escapes it.
Is this withdrawal of the state shareholder also seen in other European countries?
Yes, this phenomenon is quite global on a European scale. There are even countries, like the United Kingdom, which have gone much further than us in privatization and public-private partnerships. In France, the State played a particularly preponderant role. In our economy, public authorities were very intertwined with private powers and in particular large companies. It is also linked to the nature of our large groups, most of which belong to strategic sectors such as defense, energy, transport and telecommunications. The impact is more visible, simply because of the structure of our economic fabric. Note, however, that some are backpedaling: after complete privatization in the 1990s, the United Kingdom is carrying out rail renationalizations, due to serious problems of underinvestment in safety and maintenance.
Gérald Darmanin’s postulate is that it is better to sell these holdings rather than increase corporate tax. Is the argument admissible?
The original difficulty is that there are few in-depth analyzes on these budgetary subjects. We hear a lot of empty assertions, back-of-the-envelope calculations. When we want to bring money into the coffers, the fundamental question is who will pay. The answer is an ideological choice – not in the bad sense of the word. In this case, either private companies, particularly large multinational firms which pay little taxes, will contribute more, or the State will sell its holdings. Those who bear the brunt of these decisions and those who benefit from them are not the same in either case. The beneficiaries of a State transfer operation are mainly those who gravitate in the business world: banks, consulting and law firms… Moreover, it is all these intermediaries who have been the main drivers of the EPA transfers in the past. Gérald Darmanin’s proposal will clearly satisfy employers, but also – if it is not analyzed further – a part of the population, who does not see the interest for the State to continue to hold these assets.
Michel Barnier has not raised the subject to date. Do you think the option could be studied by his government?
Yes, if the financial situation requires it, it is not excluded that one day we will put back on the table the sale of shares in ADP or a plan for the capital of EDF, almost the last two major majority stakes of the ‘State. A very temporary breath of fresh air, given the amounts involved, but which would again lead to financial and strategic losses in the long term.
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