This half percentage point of potential growth can be achieved by a medium- to long-term reform path: the efficient firefighters of the crisis must gradually hand over to the architects. A third of the necessary progress could be achieved through two European-level transformations (II) – via investment, digitalisation and the associated productivity gains –, the rest would depend on two challenges specific to France (III). II. Two Schumpeterian transformations for Europe  Europe, like the rest of the world, will have to achieve two major transformations in the next decade: the digital revolution and the climate transition. The Covid crisis has obviously accelerated the former, and fortunately has not slowed down the efforts regarding the latter. Compared to the rest of the world – and in particular the United States – our Europe is lagging behind with the first transition, and still ahead with the second. But it suffers above all from a structural handicap: its lack not of economic weight – which we have, together – but of speed; Europe has unfortunately had less growth than the United States for the past thirty years, and less capacity for economic renewal. In a speech last March at the College of Europe in Brugesii, I voiced the wish that we should finally reconcile the two great European economists of the 20th century: Keynes – who has provided us with much inspiration in the Covid crisis – and Schumpeter – the man of innovation, whom we will need in order to achieve these two transformations.
The necessary coordination at national level must therefore be combined with mechanisms to ensure the agreement is able to cater to the existing productivity and activity-related differences across firms and sectors.8 Equally, where the standard of living of certain segments of households is hit particularly hard by rising energy costs, the incomes agreement should naturally seek to mitigate their straitened circumstances. In short, these considerations reveal the need to avoid overly sweeping measures to implement a potential incomes agreement that might prove too rigid for certain groups of agents. Third, any approaches that automatically link wages to past inflation or indexation clauses are also to be avoided9. The aim is precisely to reduce the risk of triggering a wage-price feedback loop. In this regard, workers with collective bargaining agreements registered up to March this year that provide for any form of wage guarantee clause linking the final wage increases agreed in 2022 to developments in inflation are admittedly in the minority. Nonetheless, the figure (30%) is notably higher than it was at the end of 2021, when it stood at 17%. Of even more concern is the fact that this figure rises to 50% of the total when considering the agreements entering into force in 2023, albeit still referring to a small number of agreements in this case. Fourth, any incomes agreement should provide for multi-year wage increase and job protection-related undertakings. This would offer households and businesses some certainty in their spending and investment decisions.