Jean-Claude Trichet is a former Director of the Treasury, Honorary Governor of the Banque de France, former President of the European Central Bank, President of the Académie des Sciences Morales et Politiques, Honorary President of the Bruegel Institute (Brussels) and the Group of 30 (Washington)… and President of the Jury of the Prix Turgot.
I would like to highlight two key messages for the five years following the presidential election of April and May 2027. For France, the courageous restoration of public finances. This consolidation effort is essential, as the current situation not only hampers only the country’s competitiveness and prosperity, but also undermines its authority in Europe and around the world. For Europe, the next five years will also be crucial. From a long-term perspective, Europe should consider the economic, political and geostrategic conditions that would allow it to make a resolute commitment to a political federation. France would have an important role to play in this strategic thinking.
France: restoring public finances
Restoring public finances is an essential obligation obligation for the new President of the Republic, the government and the Parliament of our country. A very serious situation, which has completely deteriorated since the great crisis of 2007-2008. Four considerations show the need for a fundamental correction.
Firstly, in 2025, our country will devote the highest percentage of GDP to public spending the largest percentage of GDP to public spending in 2025 among all the countries in the eurozone, zone, tied with Finland – more than 57% in both cases. That’s 6% more than Italy, 12% more than Germany and more than 7% more than the eurozone average 1. Compared to the main large comparable European countries, European countries, the recurring overhead costs of the French economy constitute a very serious handicap.
Secondly, our country has the highest public deficit in the eurozone in 2025, tied with Belgium (5.1%) and well above Italy (3.1%), Spain (2.5%) and Germany (2.7%).
Thirdly, our country is the slowest in the entire eurozone to restore its public accounts. France’s current commitments will lead it to bring its public deficit below the 3% of GDP threshold only in 2029. only. Italy is expected to be at 3% by 2026, Belgium and Slovakia by 2027, and Finland and Austria in 2028.
Fourthly, French public debt has been the one which has worsened the most in Europe since the global subprime subprime loans and Lehman Brothers. In 2007, French public debt represented 64% of GDP, the same level as Germany. In 2025, this debt amounted to around 116% of GDP, while the German level was still around 64%. This rapid deterioration in our situation has contributed to a significant correlative deterioration in the quality of our credit rating. At the time of the very great crisis of 2008 and in the following years, the France’s credit rating had not been called into question by national, European and global savers, unlike the five countries that were found themselves in turmoil (Greece, Ireland, Portugal, Spain and Italy). We were then borrowing at an interest rate much lower than theirs and close to that at which Germany was borrowing. Today, France borrows at 10 years, more expensively than Portugal, Ireland, Spain, Greece, and also more expensive than Italy. The relative quality of France’s credit rating has continued to deteriorate since the great crisis of 2008.
Recovery measures to be taken from May 2027
This article does not contain a programme. I will not draw up a list of the essential and possible measures to remedy the situation. In any event, a very large number of decisions that could be taken are in the public domain. But the President, the government and the Parliament will have an obligation to achieve results: to convince the country, Europe and the world that France will henceforth be at a “turning point” in the management of its public finances and that it intends to radically change its approach from a medium- and long term. I will simply emphasise two points.
First, decide from the outset to initiate the necessary reforms without delay. The consistent experience of recent years shows that waiting inevitably leads to doing only a tiny fraction of what should be done. It is therefore immediately after the elections that the decisions that appear necessary to give credibility to the “radical change of direction”: de-index many benefits 2, increase many user fees, not neglect anything because little streams make great rivers, also in terms of public finances, and – this is crucial – reform pensions without delay, which our European partners have all done 3. The example of Italy is particularly telling: this country decided in December 2011 to raise the retirement age of retirement to 67 years. This vote was passed in the Italian Parliament by a considerable majority. It has not been called into question since.
The political cost of these measures would be only a small fraction of the price to be paid by our fellow citizens in the financial crisis that would punish the government’s inaction.
Naturally, the new government should simultaneously indicate to our partners and to the Commission that it intends to be below 3%, not in 2029 but as early as 2028 (two years after Italy and at the same time as the target of Finland and Austria).
Europe: reflecting on the conditions for the success of a
political federation
Over the past 76 years, since the presentation of the idea of a European Coal and Steel Community by Robert Schuman in 1950, Europe has shown dynamism and resilience, as well as the desire to build an “ever closer union” 2.
Social protection expenditure is growing faster than the GDP growth in value terms in 2024 and 2025 (5.3% versus 3.6% in 2024; 3.6% compared to 1.9% in 2025). This trend observed in recent years is obviously unsustainable.
Will the next 74 years be marked by the same historical dynamism? The European Union today has many reasons not only to continue its historical course relentlessly, but also to accelerate its march towards an “ever closer union” by incorporating the prospect of a political federation.
Firstly, there is a major economic and financial reason for this: the absence of a federation constitutes a “glass ceiling” which prevents the creation of a true single market, like those of the the United States and China.
Secondly, there is a diplomatic reason: only a federation can negotiate with a single voice with the other countries of the world. Without a successful federation, Europe will remain permanently disadvantaged on the diplomatic front.
Thirdly, a geostrategic reason: without the unified defence of a federation, Europe cannot cannot claim the geopolitical influence enjoyed by other major powers, whether they are centralised states or federations.
Fourthly, the tendency towards “power politics” that characterises our time is directly detrimental to today’s Europe. The influence of Europeans and the European Union will remain marginal until they unite as a federation.
Fifth, emerging countries will continue, during the 21st century, to grow much faster than advanced economies. If they are not united within the institutional framework of a European political federation (federation which could become the fourth world power after China, India and the United States), each European country will rapidly lose its geopolitical influence.
During my term as President of the European Central Bank, I was convinced that a more confident move towards a federation was necessary. I have referred to this in several articles and speeches 4. I am much more daring today and am convinced that a European federation is necessary during the course of the century 5. That being said, the transition towards a true European federation seems politically difficult, given the current state of public opinion in many European countries. Nevertheless, the arguments in favour of such a federation are very strong in the long term. It is this that will enable Europe to defend, protect and promote its interests and values in a world marked by ” power politics”. Therefore, even if the ultimate goal does not seem achievable only by 2050, or even later, it is legitimate to consider from today about the conditions for the success of the future European federation, which will have to be highly decentralised.
The absence of a European federation is a “glass ceiling”
for Europe’s economy, finances and geostrategic influence
At the end of the first 76 years of European construction, of Europe, two conclusions are clear: Europe has shown constant historical dynamism, historical dynamism, both quantitatively and qualitatively. That’s a positive point.
On the other hand, the comparison that can be made today with the other major continental economies – in particular the United States and China – is much less encouraging. Two reports are revealing in this respect: revealing: the Draghi report 6 and the Letta report 7. Both emphasise not only that the economic performance of the European Union is disappointing, but also that the economic gap between Europe and the United States has widened considerably to our detriment over the last twenty years. Whether it is the growth of the real economy, the absolute level of GDP, GDP per capita, total factor productivity, factors, labour productivity, R&D investments or companies.
A key element common to the analyses of Mario Draghi and Enrico Letta’s analyses of Europe’s disappointing performance lies in the observation that the European Union does not have a truly operational single market. that is truly operational. This situation is paradoxical, because the European economic European economic structure was initially based on the idea that a “common market” (Treaty of Rome, 1957) would give the European economy the same economies of scale as those enjoyed by the American federation.
30 years later, Europe realised that the common market market was insufficient and that a completed and effective “single market” (Single European Act, 1986) was the way forward to take full advantage the economies of scale offered by the vast European internal market. Moreover, the Europeans launched the single currency – the euro – in 1999, with the explicit objective of completing the single market.
27 years after the launch of the single currency, 40 years after the start of the single market and 70 years after the signing of the Treaty of Rome, it is clear is clear that our fundamental economic objectives are still far from being achieved. There is still a lot of work to be done, as Mario Draghi and Enrico Letta advocate. I share their diagnosis as well as most of their recommendations, which are relevant from a short- and medium-term perspective, without involving institutional changes.
There is a broad consensus on the need to implement these recommendations. The Commission is striving to launch concrete policies policies through the “Competitiveness Compass” compass) and the Clean Industrial Deal. I have no doubt that significant improvements can be made, with real political will.
However, I believe that there is a permanent “glass ceiling” that prevents the European Union from competing with the major advanced and emerging economies of the United States and China. Europeans are not at the same level when it comes to their industry, their services and their financial, digital and technological processes. These powers are, for one, a centralised economy, and for the other, a fully-fledged federation. However, we Europeans are not organised as a federation. We are therefore comparing entities that are not comparable. It should come as no be surprised that the comparison works to our disadvantage. Our institutional framework explains why the current Member States – in the absence of a genuine federation – often fall back on “national vertical silos”, opposing their own logic to the overall optimisation of a vast continental single market.
This observation applies to many sectors and is particularly emblematic, even caricatured, in the fields of commercial banking and telephone operators: compared to the United States and China, each European country alone has as many companies as each of these two powers. I believe that it is now imperative not to not allow ourselves to be trapped in the short term or in the idea that Europe would be unable to carry out major institutional reforms. After all, the medium- and long-term perspective – which has proved so valuable in drawing the lessons of the historical process of the past – should also constitute the relevant horizon for illuminating the future of the European Union.
I envisage two timeframes to consider:
– the year 2050, which corresponds approximately to a period of a quarter of a century (the current lifespan of the euro);
– the year 2100, the end of the century, which corresponds to three quarters of a century (the duration of European integration since the Schuman Declaration of 1950).
For the 2050 horizon, two hypotheses seem plausible; I will designate them as H1 and H2. According to hypothesis H1, the European Union will continue to deepen its construction – towards an “ever ever closer union” – without, however, taking the decisive step towards a genuine federation. Considerable progress will be made in the economic and financial fields, not only in line with the guidelines suggested by Mario Draghi and Enrico Letta, but also in many other directions, taking into account the rapid rise of digital technology and all the economic and financial transformations linked to AI that are likely to occur over the next 25 years.
Still on the economic and financial front, the “glass ceiling” will continue to hinder the optimal functioning of the single market. Moreover, the lack of geostrategic influence comparable to that of its competitors will be a handicap in all international negotiations. negotiations. In the H2 scenario, the European Union will have been transformed, by 2050, into a genuine political federation of a new kind. It is likely that this federation would not cover the entirety of the current European Union. It is also likely that this federation would be significantly more decentralised than many others – in fact, than all the others – with the European member states retaining considerable subsidiary powers in the cultural, social, institutional and political spheres. In my opinion, it is very likely that the Europeans would systematically borrow systematically from existing federations (United States, Canada, Australia, Germany, India, Switzerland, etc.) their decentralised structures that are most favourable to the Member States.
Establish a committee to reflect on the future European federation
It is a difficult exercise to assign ex ante probabilities ex ante to scenarios H1 and H2. In the absence of significant historical events, events, H1 is likely. However, if major events were to occur over the next 25 years, H2 would become possible as early as 2050. This would require at least two simultaneous events: for example, the materialisation of a Russian military invasion of EU countries that are members of NATO (such as the Baltic States) and confirmation that, in such a situation, the United States no longer considers that its conventional and nuclear umbrella applies to Europe. Such hypotheses of a Russian attack are already considered possible by several European countries, and the American President himself has hinted in the past that he might decide not to respect the NATO Treaty.
In my opinion, it would be appropriate to set up a committee in 2027 to consider the future Federal Union of this century, by 2050 and beyond, even in the absence of current political consensus. I see three good reasons for this: first, the need to carefully consider the various institutional options for the organisation of the future government, as well as the very high level of decentralisation in favour of the Member States, which will be a major feature of the new federation; secondly, the search for the best combination of a single conventional army and the necessary component of nuclear deterrence; finally, the development of the best decision-making process decision-making process to define a unified European diplomatic position.
The Delors report is a relevant precedent: it had been drawn up at a time when there was no consensus on the single currency, currency, but there was broad agreement on the legitimacy of examining the conditions that a future Central Bank should meet, if necessary.
The advantage of launching a discussion now would be to to enable Europeans to better understand the historical challenges that are – and will be – thrown at them during the course of the century. They could thus be ready as early as 2050, if history accelerates and imposes the solution of the political federation H2. In any event, my conviction is that the European federation would be indispensable by 2100 at the latest, at the end of the century. I cannot imagine Europe being totally marginalised, both economically economically and geostrategically, at the end of this century. In the absence of a European political federation, the main world powers will probably the following: China and India (tied for first place) and the United States (in third place). As for fourth place and the those that follow, several countries would be candidates, notably Indonesia, Pakistan, Brazil, Mexico and Nigeria. Without a federal structure, the European countries would have lost all significant global influence as well as any ability to defend and promote their values. Only a united federal Europe could have a reasonable chance of being a member of the G7 (or even the G5) at the end of the century.
This observation reinforces my conviction that the future President of the French Republic could – assuming, of course, as I do, mine, where he would have campaigned on Europe – take an important initiative initiative after his election. This would be neither surprising nor unusual. In the past, the construction of Europe has often assigned an important role to France and its President. In 1950, through the voice of Robert Schuman, the start of the historic undertaking. It was the French President, in close liaison with the German Chancellor, who pushed for the creation of the European Council and accelerated the rapid implementation of the election of the European Parliament by universal suffrage (Paris Summit, 9-10 December 1974). It was the same President and Chancellor who were responsible for the initiative for the first European exchange rate mechanism, the European Monetary System, System created in 1979. Finally, it was the very strong political support of the President and the Chancellor for the single European currency project that contributed decisively to the success of this endeavour.
In addition to these reasons drawn from the history of European integration, of Europe, there are other considerations that may argue for a particular role for France and its President in terms of the move towards a political federation. The only nuclear power in the European Union, the only country in the Union that is a member of the UN Security Council, France could play a particularly important role in the construction of military and diplomatic federations.
In any event, it should above all convince its major partners, in particular Germany, to start thinking now about the future European Federal Union. This would obviously not be easy. As Jean Monnet puts it so well: “Life is generous in providing opportunities to act, but you have to have prepared for them for a long time through reflection in order to recognise them and use them when they arise.”
Notes.
1. This is the highest level of public spending among all advanced countries.
2. Social protection expenditure is growing faster than GDP growth in value terms in 2024 and 2025 (5.3% versus 3.6% in 2024; 3.6 % compared to 1.9% in 2025). This trend observed in recent years is obviously unsustainable.
3. On pensions, as well as on French public finances French public finances in general, read: Cour des comptes, “Situation financière et perspectives du système des retraites” February 2025; J.-P. Beaufret, “Mesure et démesure : retraites et déficit”, Institut Diderot, June 2025, and “Les comptes de la Sécurité sociale et le redressement des finances publiques”, Commentaire, No. 193, 2026/1, pp. 93-106; N. Dufourcq, La Dette sociale de la France. 1974-2024, Odile Jacob, 2025
4. “Building Europe, building institutions”, speech delivered on the occasion of the Charlemagne Prize award ceremony, June 2011; “International policy coordination in the Euro area: toward an economic and fiscal federation by exception”, Journal of Policy Modeling, vol. 35, 2013/3, pp. 473-481; “The ECB during the euro crisis and its future role in global disruption”, Universitätsverlag Hildesheim, 2026, available on the website HilPub. in particular in the form of the proposal to create a Eurozone Ministry of Finance and the activation of a “federation by exception”.
5. “Thank you speech”, award of the European Order of Merit, 19 May 2026.
6. Published on 9 September 2024.
7. Published on 18 April 2024. high-tech, all the comparisons in these two reports highlight significant structural weaknesses in Europe