France’s lead in foreign investment "hugely satisfying" - Riester

Attractiveness – Interview given by M. Franck Riester, Minister Delegate for Foreign Trade and Economic Attractiveness, attached to the Minister for Europe and Foreign Affairs, to BFM Business (excerpt)

Paris, 7 June 2021

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Q. – The figures that have emerged this morning are good. They come from the firm Ernst and Young, whose figures are always eagerly-awaited: in 2020, against all odds, France remained the most attractive country in Europe. Last year France was still in the lead, with 985 projects, even though it was an 18% reduction, which was less marked elsewhere, I believe: down 12% in the UK, 4% down 4% in Germany. What’s your view of these figures, overall?

THE MINISTER – First of all, it’s hugely satisfying to see that France still tops the ranking of European countries in terms of attractiveness, i.e. in terms of foreign investment projects on our soil; nearly 1,000 projects, even though we’ve had the COVID crisis. We started from a very high point in 2019, hence the perhaps larger reduction than in other countries, but we’re still ahead, which clearly demonstrates that laying the groundwork pays off and the transformation of the country engineered since 2017, the measures to protect our economy, and the recovery plan are helping investors continue choosing France.

Moreover, we have investors who are investing a lot in industry; we’re in the lead, and way ahead, in terms of industry, with investors who are investing throughout France; and for us that’s very important. 40% of projects are in communes with fewer than 20,000 inhabitants. So this development and investment isn’t only in the big cities, it’s all over the country. And it creates a lot of jobs, because we’re also very well ahead on that score, in terms of jobs: 30,000 jobs created by France thanks to those projects.

So you can clearly see that the policy of aiming to improve our country’s competitiveness and attract the best people, talented people, and invest in the future, in future technologies, is perceived positively by investors; 60% of the projects have come from investors who are already in France and are still choosing France. So they feel at home in France, and that’s obviously very satisfying.

Q. – The figures are good, we’re still in the lead. I’m going to play devil’s advocate: I was saying 18% fewer projects even so in France, 12% fewer in the UK and 4% fewer in Germany, also because we’ve suffered from the postponement or abandonment of projects in sectors where France is very strong: aerospace, the automotive sector and the services industry. Has that worked against us, somewhat?

THE MINISTER – Yes, I really think we were at a very high point in 2019, very well ahead. So obviously, when you start from a very high point you may fall a bit faster, but we’re still high; that’s the first point. The second point is that it’s true there are a number of investments in the sectors you mention that have been postponed or shifted a little, because they’re sectors that have been especially affected by the crisis, particularly aviation.

For all that, I really believe that what you have to remember is, firstly, [that we’re in] first place, and secondly the diversity of projects, and particularly industrial projects. It was often said – and it was true – that France wasn’t sufficiently competitive industrially, hence the country’s de-industrialization. The President’s strategy – which is to bank on the country’s competitiveness in order to create wealth in France, create jobs in France and then go international – is the right one.

Q. – A word about the support plan. Investors are saying they intended to look at the scale of support plans in various countries on a case-by-case basis. Actually, the thing is that there’s massive aid, much more pronounced in France than in other countries, and this also played a part. Actually, that’s the good news. The bad news is that we’re reaching the end of “whatever the cost”. What will happen afterwards, when we finally start disconnecting the drip?

THE MINISTER – First of all, indeed, it’s been very highly regarded and very useful. We had very few bankruptcies in 2020, we maintained our skills base, i.e. company employees in companies so they could later bounce back, and that’s what we’ve been seeing for a few weeks now, in 2021, with a very strong rebound in the economy, as Bruno Le Maire recalled. We really would like to move gradually [back] to a normal system. We don’t want to cut everything off in one go, because we have to continue supporting people, and above all we mustn’t destroy all the efforts we made in 2020 and since the beginning of the crisis – large-scale and rapid support for the economy –, which would really be a bad decision, because it wouldn’t allow us to take advantage of the rebound we’re hoping for.

Large-scale, rapid emergency measures, an ambitious recovery plan, banking on investment and skills, and transforming the country since 2017. When I talk to foreign investors, they say to me: on taxation, it’s true France was very far behind; you’ve done a lot, abolishing the ISF [solidarity tax on wealth] in the area of securities, reducing capital gains tax with the 30% flat tax, and reducing corporation tax: it’ll be 25% in 2022.

Q. – Roughly the European norm.

THE MINISTER – Indeed, it was 33% in 2017. And also the reduction in production taxes: €10 billion in 2021, €10 billion in 2022. When you take things industry by industry, it’s noticeable, it’s very clear what this gives them in terms of budgetary flexibility so they can invest. How many business tell me: “Thanks to this reduction in production taxes, we’re going to invest in the production tool”? Well, there are a lot. (…)./.

Published on 08/06/2021

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