BlackRock Gives Macron Kudos Even as French Hold Back Their LoveBy
French president stuck with low popularity ratings in polls
Tough reforms that please investors are angering some citizens
French President Emmanuel Macron is hugely popular -- with money managers like BlackRock Inc., that is.
While Macron languishes in French polls, investors give him high marks for his plans to reform the country. On Wednesday, the president dined with 21 top executives of the world’s biggest funds including BlackRock Chairman Larry Fink. Under a skylight and 18th-century crystal chandeliers in the Elysee presidential palace’s Winter Garden, Macron presented to them -- in English -- his plans to transform the 1,500-year-old nation.
“Yesterday’s session was beneficial to the investors present and reinforced the view that the opportunities in France are the strongest they’ve been in two decades,” BlackRock said in an emailed statement. “We’re encouraged by the French government’s dynamic approach to economic transformation. We continue to be interested in the long-term investment opportunities that the country has to offer.”
The New-York-based firm, which oversees about $6 trillion globally, is a shareholder in all of the companies in France’s benchmark CAC 40 index. According to data compiled by Bloomberg based on regulatory filings, France accounts for 11 percent of BlackRock’s shareholdings, ahead of the U.K. BlackRock is among companies the state is courting for long-term investments, especially as it seeks to divest some its own holdings.
Macron, a former investment banker at Rothschild in Paris, told his guests he wants their stable flow of funds, and was in turn pleased to hear the executives say they plan to change their asset allocations: less U.K., more continental Europe. According to a Macron adviser present at the dinner, the investors asked about investment opportunities and “pragmatic” questions about France and its unions. They told the president continental Europe’s economies represented stability in the face of global instability, the aide said.
While investors are fans, the French have yet to fully warm up to their new leader.
Opinion surveys in the past months show the 39-year-old has quickly lost the momentum that followed his May victory against populist Marine Le Pen. At six months, he has the same approval rating as his predecessor, Francois Hollande, who over his term was the least popular French president since polls started.
According to Paris-based Ifop polling institute, 42 percent of the French approved of Macron in October. That’s as much as Hollande at the same point in his term, but 17 points below the popularity levels Nicolas Sarkozy enjoyed after six months. Both Hollande and Sarkozy were one-term presidents.
Macron has shrugged off opinion polls, and even said in April during his campaign that he was “the living example that what they show is wrong,” citing surveys that showed he didn’t stand a chance to even be a presidential candidate. This month, in his first national television interview, he said he doesn’t “spend my days looking at the polls.”
The cause of many French people’s displeasure with Macron is the same reason many investors are lauding him.
He has relatively easily pushed through labor-market reforms that have eluded his predecessors. Now, he is embarking on an overhaul of France’s unemployment insurance and will have to deal with its deficit-generating retirement system -- both of which may prove thorny. Two of France’s biggest unions are planning protests on Nov. 16 against Macron’s reforms. The French oil-industry workers’ union FNIC-CGT has called for a 24-hour strike on Nov. 23.
Also, Macron’s effort to scrap France’s wealth tax is overshadowing other government policies as opponents portray him as an “anti-Robin Hood” who is taking from the poor to give to the rich.
“The most difficult tasks lie ahead for Emmanuel Macron,” said Raymond Soubie, who first started handling labor and social relations for governments in 1969. Soubie called the wealth tax a “symbol” that Macron touched upon and as it comes at the same time as other budget cuts, the situation could become “explosive,” he added.
As he confronts French displeasure, Macron’s office is careful to point out that the dinner he hosted for the investors was simple -- “nothing lavish” was served, an official said.
— With assistance by Rudy Ruitenberg