France Seeks to Overcome Anti-Business Image, Lure Investment
Arnaud Montebourg, the French industry minister who last year addressed a labor conflict by saying the world’s largest steel company was not wanted in France, is laying out the welcome mat for foreign investors.
Seeking to overcome Socialist President Francois Hollande’s government’s anti-business image, Montebourg today said France is open to foreign companies and a great place to invest.
“I want to put the current mood of pessimism in perspective,” Montebourg told reporters at a presentation in Paris. “France remains the No. 1 destination for industrial investment in Europe. We haven’t seen any slowdown in foreign investment. What we’re trying to do here is amplify an already good phenomenon.”
Hollande’s government, which has sparred with business leaders over taxes and job cuts, has set a target of attracting an additional 300 foreign companies a year to invest in France. Investment is critical as France’s economy is barely growing and jobless claims are at a 14-year high.
France has 20,000 foreign companies, with 700 new investment decisions each year, the government says. It wants to raise new arrivals to 1,000 by 2017, when Hollande’s first term ends.
Toward that end, Hollande’s government has extended a research tax credit enacted by his predecessor Nicolas Sarkozy, and announced a further 20 billion euros ($26 billion) of tax credits to reduce payroll charges. Hollande has also said he’ll streamline administrative procedures and reduce the amount of time the state takes to pay its bills.
In November, Montebourg created a furor accusing steelmaker ArcelorMittal (MT) of not keeping its word about protecting jobs at its Florange plant in northeast France and telling newspaper Les Echos that “we don’t want Mittal in France anymore.” He threatened to nationalize the plant.
ArcelorMittal and the government last month reached an agreement to keep the plant going.
Laurence Parisot, the head of the French business lobby Medef, said at the time that Montebourg’s comments threatened to keep investors away from France.
In a separate meeting with reporters yesterday, Montebourg said he believes in “fair trade” rather than “free trade,” and that the world’s companies are welcome in France as long as they stick to their commitments.
He also said that while labor expenses are higher in France than in neighboring companies, the total cost of investing in France is lower.
“There aren’t just labor costs,” Montebourg said today. “There’s real estate, there’s the cost of energy. There are many comparative studies that are very favorable to us.”
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