French Midcaps: Healthy but Unhappy

Solid companies will go bankrupt, says entrepreneur Bruno Vanryb, whose group is pushing for legal reforms and easier credit

The roughly 600 small- to medium-size companies listed on the Paris stock exchange are a major force in the French economy, generating more than $87 billion in annual revenue and employing more than 700,000 people. And while some erstwhile French corporate champions such as Vivendi Universal (V ) and France Télécom (FTE ) have run up staggering debts and reported big losses this year, these midcaps are in pretty good shape. Trouble is, they're almost invisible to investors, representing only 5% of market capitalization on the French exchange.

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