Edouard Philippe says country is open for business and serious about spending curbs

5 hours ago by: Anne-Sylvaine Chassany and Michael Stothard in Paris

Edouard Philippe owes his job to President Emmanuel Macron. But France’s prime minister of two months makes no claims that his boss’s reformist presidential agenda is any radically new ideology.

Rather, in his first foreign media interview, Mr Philippe shows loyalty to his former party by suggesting that “Macronism” is the direct legacy of Alain Juppé, the unsuccessful centre-right presidential hopeful and Mr Philippe’s mentor in politics.

When it is suggested that the government’s plans for a more flexible labour market, tax cuts for businesses and emphasis on public spending curbs were all rightwing measures, Mr Philippe bursts into laughter. “Yes, what did you expect?” he says.

In his office in the Matignon palace, with the recently issued presidential portrait of Mr Macron still leaning against the wall, Mr Philippe, who was a senior party leader in the centre-right Republicains, tells the Financial Times: “I feel that what we’re implementing here is compatible with what we defended in Alain Juppé’s presidential programme. I feel very much at ease with myself.”

Yet, like his role model Mr Juppé, who as Jacques Chirac’s premier became the most loathed French politician of the mid-1990s, Mr Philippe is also discovering the inherent challenges of his job. What we’re implementing here is compatible with what we defended in Alain Juppé’s presidential programme. I feel very much at ease with myself Edouard Philippe, French prime minister

French prime ministers of all stripes have found themselves stuck between a president with vast executive powers, who typically uses the premier to deliver the bad news, and an ambitious cabinet of ministers. Michel Rocard, the reformist Socialist premier who became François Mitterrand’s punchbag, went so far as to describe the French premiership as “the Matignon hell”.

Unlike Mr Juppé, Mr Philippe’s approval ratings are still high: polls show that nearly two-thirds of French people have a good opinion of him.

As he meets the FT, the prime minister, dressed in a crisp blue suit and tie, with silver cufflinks shaped like dragons, can afford to joke that the huge sabre adorning his office is meant to cut journalists’ conversations, and heads, short.

But the past week has brought his first difficulties. First, Mr Macron stole the show last week by choosing to address a pompous joint session of parliament in Versailles, a day before Mr Philippe’s formal speech on future policies to the lower house.

Then after Mr Philippe told MPs that flagship tax breaks would have to be delayed to bring France’s deficit in line with EU rules, economy minister Bruno Le Maire seemed to push for earlier adoption, appealing to the president himself.

Mr Philippe, who as mayor of the Normandy port of Le Havre used to take out his frustrations by boxing three times a week, sounds philosophical about the whole affair.

He says that like Mr Le Maire he “would love” to simultaneously implement Mr Macron’s pledged tax breaks and meet Brussels’ deficit limit of 3 per cent of gross domestic product. But this requires tough spending cuts, he warns.

Mr Philippe admits that there are ongoing discussions, to be resolved this week, over reform of France’s wealth tax as soon as next year instead of 2019, as he indicated last week. A plan to scrap property taxes, which would cost €10bn, could also be implemented as soon as 2018. Reforms planned by Edouard Philippe reflect desire to lure business

“We are discussing the pace of the measures, taking into account our other constraints,” Mr Philippe says. “More than the measures, what matters is the direction. The main goal is visibility. No matter what, by the end of the year, we will pass a bill detailing the timing of all the fiscal measures for the next years.”

The backtracking highlights Mr Philippe’s dilemma in trying to stimulate investments and jobs with one hand while making sure that France emerges from Brussels’ so-called “excessive deficit procedure” with the other. If Paris fails to plug an €8bn hole this year, it will be the only EU country in breach of the bloc’s requirements, France’s public finance auditor said last month. Mr

Macron wants to turn France into a resolutely pro-business investment destination after his Socialist predecessor, and former boss, François Hollande ruined the country’s reputation with tax rises that prompted a public “revolt” of entrepreneurs.

France is also keen to lure business looking for an alternative to the UK after its vote to leave the EU.

Last week, Mr Philippe announced measures directed at banks considering moving from London to Paris, including the scrapping of the highest bracket of payroll tax on bankers and the opening of English-language classes.

These carrots come in addition to a hefty income tax break of up to 50 per cent for financiers and the right to exclude foreign properties and assets from the calculation of wealth tax for eight years.

Mr Philippe says the message to the world is that France is open for business and serious about curing its “addiction” to public spending.

Born in Rouen to teachers who taught him a love of reading (and writing: Mr Philippe has published several books, including political thrillers), the prime minister graduated from ENA, the elite school that grooms France’s top civil servants. New president is in a much stronger position than predecessors to overhaul the economy

He became a lawyer at the Conseil d’Etat, France’s supreme court, before helping Mr Juppé found the Union pour un Mouvement Populaire, the centre-right party later renamed Les Republicains by former president Nicolas Sarkozy.

But Mr Juppé lost his party’s presidential contest to François Fillon, while Mr Fillon fought a disastrous, scandal-stricken presidential campaign.

Mr Philippe did not need much convincing to accept Mr Macron’s offer of the premiership.

“The president was elected on a very clear message that was both pro-EU and pro-business, which is unusual in France,” Mr Philippe says. “There’s something quite powerful and deep happening in this country.”