In Macron’s presentation meeting with Wall Street, as budget problems grow By Reuters

By Nupur Anand and Michel Rose

NEW YORK/PARIS (Reuters) – French President Emmanuel Macron gave top U.S. financiers a frank assessment of his country’s financial woes, signaling the potential for imminent tax hikes, sources said this week in an effort to allay concerns about France’s deficit deficit. .

Macron, a former investment banker, met with more than a dozen Wall Street executives in New York during the UN General Assembly late last month to reassure them about France’s deteriorating fiscal outlook, according to three people who heard Macron.

In a more than hour-long meeting with 13 financiers and senior asset managers, including Goldman Sachs chairman John Waldron and Blackstone (NYSE: ) CEO Stephen Schwarzman, Macron offered a candid view of the French economies and European, they said.

Macron talked about the likelihood of raising taxes to finance the country’s budget, one of the participants told Reuters, speaking on condition of anonymity because the meeting was private. The president was also candid about France’s economic challenges, the source said.

He also presented France as a potential investment destination and discussed how to expand business from multinational companies.

Macron knew the meeting participants well after seven years of organizing “Choose France” summits. These gatherings sought to change investors’ perception of France as a dynamic, pro-business nation instead of a sclerotic, high-tax country.

He met bankers on September 24, just as his new minority government was starting to draw up a budget to tackle a deficit that risks exceeding 6% this year, fueling speculation about tax hikes.

The meeting followed a smaller but similar gathering during the Paris Olympics this summer.

Europe’s economic slowdown has made it necessary to shore up public finances through specific and temporary tax increases, Macron said, according to a second person who was present at the meeting.

The increases would mark a U-turn for France, which has cut taxes on big business under Macron. He urged investors at the meeting not to overreact to any tax hike and said his goal is primarily to cut spending.

Foreign investors hold around 50% of France’s total public debt, much higher than other eurozone countries including Italy, Spain and Germany.

Macron aides said the president had focused on France’s credibility with investors since a snap election in the summer that led to a deadlocked parliament and political uncertainty.

Macron’s office declined to comment beyond the brief statement he made last week announcing the meeting.

In a clear sign of investor nerves, French borrowing costs, which are typically lower than Spain’s because the country is seen as less risky, have overtaken Spanish ones.

However, Macron avoided making promises to the gathered funders, the first participant said.

The president is taking a proactive approach in meeting with business leaders, a third person said.

The meeting on Wall Street came a week before Prime Minister Michel Barnier announced plans to reduce the deficit to 5 percent in 2025 by cutting spending and temporarily raising some taxes on big corporations and the wealthy.

Barnier’s budget minister has spoken of a €60bn belt-tightening drive next year.

Macron also discussed artificial intelligence, nuclear power and regulation, attendees said.