Did Emmanuel Macron dissolve foreign investments at the same time as the Assembly?

by time news

According to a study published ⁢by the EY company, which interviewed the intentions of two hundred managers of⁢ foreign-invested companies in October, one in two ‌believes⁤ that ⁢the attractiveness of France ‍has “decreased in the⁢ last six months”. Top reasons given: “political⁣ uncertainty resulting from ⁢the dissolution of the National Assembly” (61%), ‌“uncertainty relating to corporate⁣ taxation in France” ​(42%) and “deterioration of public finances in France” (37%).

Consequence: one in two ‌(49%) decided‍ to ⁣reduce​ planned investments in France in 2024, after the dissolution of the National⁢ Assembly. ‍59% of ‌those holding back​ mention “regulatory and legislative uncertainty”, 47% “the‌ slowing down of the​ reform‌ agenda” and 40% “the questioning of⁢ previously made ‍public decisions, particularly in key sectors” .

“Despite love”

For Marc Lhermitte, ‍partner at EY, the dissolution of the National Assembly marks, for⁢ foreign⁣ companies, the end‌ of a “long ⁢period in which the course ‍was set and constantly maintained, ​with what ⁢some have defined as a supply-side policy In any case, a true pro-business policy that⁣ has re-established trust.”

Who will⁤ benefit from this air gap, if it is confirmed? EY believes that “the UK‍ could be⁣ the first beneficiary of ‍this French disruption, in a context ​where Europe is threatened by American protectionism and Chinese ambitions”. 42%⁣ of the managers interviewed believe​ that “in the last six months the⁣ United Kingdom has gained⁢ in attractiveness compared to France”, compared ‌to 29% who think the opposite.

READ ALSO “It’s a blast”: Macron, the strange end ⁢of his reign Will the dissolution have the same effect‌ on France as Brexit has on the United Kingdom? Since 2017, the number of foreign direct investments has fallen by 18% across the Channel. ⁣“It‌ is still too early to say⁢ whether there⁤ will be⁢ a shift in favor of⁢ the United Kingdom,” comments Marc Lhermitte.

“It is a country that still has​ a big problem with ⁢inflation, or ⁤the quality of ‍public services. But it has advantages for American⁣ companies, with a super-flexible⁢ job market that resembles what they find at home. » Main advantage compared⁤ to the‍ current situation in France: “The rules of the game are clear. » Germany, for ‍its part, is evaluated even more‍ negatively than France by foreign investors. But “challenger countries,‌ such as Spain, Italy or the⁣ Netherlands, where the rules of the game are‌ clear, could take‍ the chestnuts out ​of the fire”.

“First expectation: taxation”

What could permanently convince ⁣these investors to continue⁣ choosing France? “Their first expectation is taxation,” estimates Marc Lhermitte. “If we asked them to contribute, in an ​exceptional way, ‌to the public deficit and debt​ repayment, this contribution would have ⁤to be measured in time and in⁣ its amount. » They want to pay well, but expect “give and take”, ‍with “optimization of public spending” and “simplification of their‌ daily lives”.

Second expectation on their part: “They ⁣want more Europe. » “The Draghi⁤ report has ​helped to ​outline ⁤a true European course, which resembles the one that French leaders have been “buying”⁢ for several years. » They would also ​like “a‌ clearer deployment of decarbonisation and the ecological ​transition”.

When​ asked about the fate of unrealized investments in 2024, 84%‌ of⁣ managers responded that they will be postponed until at least 2025. Over 60% plan to develop‌ research⁢ and development or ⁣services⁣ activities in France by 2027,‌ but only 49% plan to create or expand⁢ factories within⁤ three ‍years.

And just 15% plan to develop decision-making centers in France. The next ‌EY barometer will tell, at the beginning of 2025, whether or not the‌ foreign investment​ curve in​ France has​ inverted this year. And⁢ if so, ⁤which countries will have ‍benefited from it.

How could political stability impact France’s appeal ‌to foreign investors in the​ future?

Interview: The Changing Landscape of⁣ Foreign Investment in France

Editor⁢ of Time.news: Welcome,​ Marc Lhermitte, partner at EY. ⁣It’s a pleasure⁢ to‌ have you​ here to discuss the recent findings ‍regarding ‍foreign investment in‌ France. Based on the study conducted in October,​ we see ⁣a notable ⁢decline in the attractiveness of ‍France to foreign managers. What are the primary factors ‍contributing to‌ this ​perspective?

Marc ⁢Lhermitte: Thank you for having me. Indeed, the study highlights some significant concerns​ among foreign‌ investors. Approximately 50% of managers believe ⁤France’s attractiveness has diminished in the ​last six months. ​The top reasons include⁢ political uncertainty following the dissolution of ‍the National Assembly, which was cited by 61% of ‌respondents. Additionally, uncertainties surrounding corporate taxation and the​ state of ⁤public finances also play ‌critical roles in shaping these sentiments.

Editor: ‌Political instability can be disconcerting​ for investors.⁤ How do you see this⁤ uncertainty specifically ‍affecting ⁣investment decisions for⁣ 2024?

Marc⁤ Lhermitte: It’s quite⁤ telling that 49% of​ those surveyed indicated a reduction in planned investments in France ⁤for the upcoming year. Many are particularly ⁢concerned about regulatory and legislative uncertainties, which 59% reported. This anxiety is compounded by the slowdown in the reform agenda,‍ with ⁢47% ⁣pointing to that ⁤as ⁤a⁢ deterrent, along with worries about the potential reversal of previously made public decisions in key sectors.

Editor: ‌ It‌ sounds like a ripple effect is occurring. Who do you think stands to ⁤benefit from this shift in⁢ investor sentiment?

Marc Lhermitte: From our analysis, the UK is likely to gain from this turbulence⁢ in France. It seems that 42% of the managers interviewed believe that the UK ⁤has​ become more attractive in comparison to France within the last six months. However, we​ should approach this with caution. ‍While the UK provides ‍a flexible job market that appeals to American companies, it still grapples with inflation ⁢and public service quality ⁣challenges.

Editor: ⁤How​ would you compare the current situation in France to the repercussions of ⁢Brexit⁣ on the UK?

Marc Lhermitte: That’s⁤ an important question. We can draw parallels in terms of investor caution. Since Brexit, the⁤ UK saw a‍ decline of about 18% ⁢in foreign direct investments. However, it’s still premature⁢ to say ⁣whether a⁣ similar trend is imminent in⁤ France. The context is different, but ‌the underlying sentiment ‌of uncertainty ⁣can drive⁤ investors to hesitate.

Editor: Considering these dynamics,​ what can France do to⁣ restore investor confidence?

Marc Lhermitte: Restoring‌ investor‌ confidence would require clear communication and a stable‍ political environment.⁣ It⁢ would also entail a⁤ commitment to uphold and advance reforms that have been⁢ put on hold. ⁤By addressing regulatory uncertainties and ensuring that past public decisions in⁤ crucial sectors remain intact, France could re-establish the ⁣trust that many investors previously felt.

Editor: Thank you for providing such insightful ⁤analysis, Marc.⁣ It seems there is ⁣a challenging​ path ahead for​ France to ⁤navigate amidst global competition. Any final thoughts?

Marc Lhermitte: Indeed, while there are challenges, there is also an​ opportunity. ‌French policymakers ​need to act decisively ⁤to reassure foreign investors. ⁤With‌ the right steps, France can not ​only regain​ its attractiveness but also position itself as a leader in the European ⁣investment landscape.

Editor: Thank you once again, Marc. It has been a pleasure discussing these important issues with you. We look forward to seeing how the situation evolves in the coming months!

You may also like

Leave a Comment

Statcounter code invalid. Insert a fresh copy.