“The France of the territories is doing much better than we say” (Eric Lombard, CEO of the Caisse des dépôts et consignations)

You recount in “At the heart of useful finance, what is your savings for?”, published this month by Editions de l’Observatoire, your four-year experience at the head of the CDC. This book is a call for a second term after the presidential election?

ERIC LOMBARD: That’s not the purpose of this book. I was appointed by the President of the Republic on a project. If Emmanuel Macron is re-elected, we will have to think about the continuation of the project for the Fund. On the other hand, I wanted to explain the role of the Caisse des Dépôts, because it is the Livret A, it is the money of the French and that obliges us. And the CDC has changed a lot, I also wanted to show it.

It is customary to say that a cat would not find her young there…

When I arrived, it was still true for a general manager! Coming from the private sector, from a large company in the insurance sector, I discovered that there were twenty departments that reported to the general manager, not counting the presidents of subsidiaries. So much so that there were meetings with almost thirty people. This is why I very quickly pushed for us to do something more operational, bringing together four businesses and creating five cross-functional functions. In five years, we have tripled the group’s balance sheet. From 400 billion euros, it is now close to 1,200 billion euros, in particular since the merger between CNP and La Poste.

You denounce in the book the disruptions of capitalism and the rise of inequalities. The situation has worsened with the Covid crisis, in your opinion?

Since the financial crisis of 2008 and during the last decade, we have witnessed a growing imbalance in the distribution of wealth which has now become massive and constitutes, in my opinion, a brake and a danger for economic stability. This comes from the fact that the profitability of capital is excessive, compared to that of labour. The social balance that allowed the 30 Glorieuses is broken and the interests of managers are now aligned with the world of finance. Financial investors continued to demand returns of 8-10% in a world of zero or even negative rates. This cannot end well. This distortion of the creation of wealth to the benefit of the holders of capital and to the detriment of the workers has reached its limits. In the new post-covid world, as new imbalances appear with more inflation, a greater share of wealth creation must go to employees. And also that finance change its vision to take into account the challenges of the long term, in particular the ecological transformation which requires massive investments. This change cannot come from taxation and must come from within finance itself, by readjusting performance requirements.

How to change capitalism?

One of the reasons for the current disruption is that interest rates are too low. Investors need to get used to more reasonable returns, around 4%, in order to rebalance the system. At Caisse des Dépôts, we put this into practice in our missions of general interest. At the Banque des Territoires, we are asking for a return of 4% to help accelerate investments in the ecological transition.

What is your position on ESG criteria and extra-financial indicators. Is this likely to change the rules of the game?

Yes, provided you add a wealth sharing rule that is not sufficiently well integrated into ESG. To succeed in the ecological transformation and for it to be socially just, a new sharing of value must be defined. This rebalancing is therefore essential otherwise the decarbonisation of the economy, we will not succeed in doing it when the emergency is there.

Let’s talk about the CDC. You campaigned on the theme of the creation of a “Territorial Bpi” which has become the Territorial Bank. What conclusions do you draw four years later?

Hélène Rey of the London School Economics has an illuminating formula: “the urgency of the long term”. This is what the Caisse des Dépôts does, with Bpifrance as with the Banque des Territoires, we finance the France of tomorrow by meeting the needs of the France of today. It is in this spirit that we wanted to be in Suez, to join GRT Gaz for biomethane and hydrogen, and to remain a shareholder of RTE. As well as through Bpifrance, we support the startup Ynsect. This vertical factory consumes little land, has an advanced social model and goes beyond texts on labor law or paternity leave. What is striking is that we measured the result of our action in near real time. At the beginning of February, I inaugurated the rehabilitation of an industrial wasteland. As soon as we go into the field, elected officials from all sides say thank you. The France of the territories is doing much better than people say.

It’s a little counter-intuitive, between the crisis of “yellow vests” and the “convoy of freedoms”, we also hear a lot about the suffering of the territories…

The France of Yellow Vests is in a crisis of recovery. People demanded their share, because the economic crisis was over. Unemployment is decreasing everywhere, in Mayenne, in Vendée, in Indre. One evening, I came across a report at 8 p.m. on TF1 in Chateaubriand, located equidistant from Nantes, Rennes and Angers. Bosses and employees even said that immigration had to be increased to meet recruitment needs. Far from the debates of this beginning of the presidential campaign.

With the Banque des Territoires, we have innovated: we have been able to launch Action Cœur de ville” in 222 medium-sized towns with 5 billion euros on the table. I met dozens of mayors. In Châteauroux, there is an incubator with start-ups. In five years, things have changed a lot!

We saw the “Yellow Vests” crisis as a validation of our diagnosis. Whatever may be said, President Macron is the one who has done the most for regional planning. Paris and the French desert, it’s over. With the “Industrial Territories” program, Caisse des Dépôts has invested massively to create the conditions for the country’s reindustrialisation. And it costs the taxpayer nothing.

In this spirit, we have also launched “Small towns of tomorrow” endowed with 3 billion euros in 1,600 municipalities. We are going to pay out 200 million euros in engineering credits. I could multiply the examples: in Buzançais in Indre, we redid the town center to link it to the town hall and the main street. The urban planner consulted advised blowing up the four houses in the middle of this alignment. Since then, people have found themselves in the newly created square. Ditto in Villedieu, still in Indre, where we are going to group together in the same place two parts of a school 500 meters away from each other.

The Senate has just launched a joint control mission on the revitalization of city centers and town centres, in particular to examine the interest and impact of the two government programs “Action heart of the city” and “Small towns for tomorrow”. What do you expect?

Processing is in progress. We have also resumed the neighborhood policy. Since the start of the five-year term, the National Agency for Urban Renewal (ANRU) has been revitalized and has been operating with great vigour. With the Ministers of the City Nadia Hai and Labor Elisabeth Borne, we met entrepreneurs in the so-called productive districts. In the meantime, we must strengthen the city’s policy and above all make the link between “Action Cœur de ville” and the districts. At the same time, we are also integrating the station districts.

The ecological transition is unavoidable, but shouldn’t we go back to the deadlines of 2025, 2028 and 2034 from which housing E, F and G will be prohibited for rental?

We cannot say on the one hand that there is a climate emergency and on the other leave thermal sieves. Housing accounts for 40% of CO2 emissions. In France Relance, we are financing the renovation of 22 million m2 of public buildings and social housing. Based on an idea by Olivier Sichel, Deputy Managing Director of the Caisse and Director of the Banque des Territoires, the Postal Bank has just marketed the renovation advance loan. An advance for private actors who have little income. They do not have to repay it, except when the property is transferred or when the estate is passed on. This lowers energy bills and upgrades property.

Why aren’t we building enough in France?

Due to the zero net artificialization of the soil, mayors must build high up, on wasteland and densify city centers, except that the French fear these new constructions. The idea that is circulating which consists in giving building permits to the prefects, without consultation with the elected officials, does not seem to me a good idea. Real dialogue is needed to get projects off the ground. We must therefore leave the permits to elected officials but give them both incentives and financial constraints. The government abolished the housing tax, but restored the property tax. Let’s go further by allowing them to get extra income to build nurseries and schools, and tax them if they don’t build!


Eric Lombard, “At the heart of useful finance, what are your savings for?”, Editions de l’Observatoire.