The French government's tackling of pension reforms will be a defining element of France's collective disposition" between government and the financial market to ensure the prosperity of Paris in the Euroland, announced Dominique Strauss-Kahn, France's minister of Economy, Finance and Industry at the Paris Europlace conference this summer.

With the imminent release of socialist minister Gerome Cahuzac's pensions report, Strauss-Kahn stressed this demonstrated the government's will to address seriously questions of public finance and create a favourable investment environment.

The rest of the work, he added, was "in the hands" of the finance industry: "I am listening and expecting much from you, so that together we can build Paris into the most succesful market in Europe," he told the audience. Any doubts about France's economic readiness for the Euro had now been banished, he said.

"Unemployment is falling, interest rates are down and growth is at a steady 3%, so I think we are ready to be at the head of the Euro movement. What has been incredible is the speed at which Paris has adapted its market technology and outlook to make the transition so positively."

Strauss-Kahn's optimism was backed up in a surprise speech at the conference by Felix Rohatyn, US ambassador to France.

Rohatyn praised the strong relationship blossoming with the US, strengthened through the Franco-American Business Council. France, he said, looked extremely capable of leading the Euro market, due to its low inflation, booming investment and strong private companies. "America has never been closer to France, and we are seeing real dialogue between companies which is leading to a better business understanding between the two countries."

The main thrust of his speech though, dubbed the possible 'third way' for European investment, suggested a move to 'popular capitalism' through increased personal buying of stocks and shares, which Rohatyn claimed was the key to present US economic success.

With private investment now accounting for about for about 48% of the total market in stocks and worth $3.8trn, alongside employee ownership of 8% of equity, Rohatyn explained: "This creates the political dynamic of a balanced budget, with low tax and high growth, which coupled with the federal social security net ensures an environment of profitabilty with fairness."

John Watts, chairman of Fischer Francis Trees & Watts US investment managers addressed the question of whether the 'euro' securities market would develop towards the US model.

Arguing against, he said that the US market had developed gradually over 30 years around large private funded pension funds enabling it to circumvent regulation. This, compared to Europe where customs barriers still inhibited full completion of the market, and tax, labour and pension differences would mean slow convergence with the US.

"The American market is a fast moving target and the challenge for the euro market will be to catch up," he noted.

However, on the positive side convergence is likely to be faster than expected, he commented: "Competitive pressures are eroding barriers worldwide, and with global investment banks and managers using the same techniques and instruments, the Euro market should catch up quickly."

Claude Bébéar, chairman of the executive board and CEO at AXA, the French insurance group, whilst praising the success of European insurers during the last 10 years in breaking into the top 14 of world groups, warned against the current trend of breaking down the traditional barriers in financial sevices.

"I'm convinced convergence is a big mistake and only causes companies to mix up their business, thus diluting the industry as a whole," he argued.

Bébéar stressed that the globalisation of the insurance market was far from complete and there was danger ahead for small to mid size companies, some of which he said would inevitably succomb to the consolidation occuring between larger groups.

AXA's strategy, which now saw the company operating in 54 countries worldwide was to be strong and professional in all areas to satisfy increasingly international customers and competitors, he commented.

This included sometimes selling products through banking networks, he conceded, but was also developing through greater direct internet sales. However, he also expressed fears that with 45% of stocks in French insurance companies now foreign owned, there would soon be no 'truly' French players left in the market. Hugh Wheelan"