The atmosphere was not the same as in previous years. Instead of receiving corporate executives from all over the world in the magnificent royal palace of Versailles, Emmanuel Macron had to be content with a brittle video switch on Monday. But for him it was about the principle and about keeping in contact: The French president does not want his investor conference Choose France, which he holds annually in January, to be completely ruined by the pandemic. So France’s top location advertiser praised a select video audience, including the heads of Siemens, Nestlé and Snapchat, the benefits of its Corona economic stimulus program amounting to 100 billion euros.
The facade is important, and not just in Versailles. Macron cultivates his image towards foreign managers as a company-friendly reformer, as he made a name for himself in his first years in office. Those around him are also proud of how France had become the most important recipient of foreign direct investment in Europe before the pandemic. However, behind Macron’s facade, economic and political reality has changed again since then.
Because the Corona crisis has changed everything. Inwardly, to their own compatriots, Macron and his Minister for Economic Affairs, Bruno Le Maire, are now mainly sending protectionist messages. The longer the crisis lasts and the more violently it rages, the louder and more often they speak of “sovereignty”. The head of state obviously does not want to offer a political target: there is only about a year left until the next presidential election – and in the polls the right-wing extremist Marine Le Pen is ahead of him. An open economy acts like an open flank.
Some foreign investors have already felt what that means recently. Volkswagen, for example: Minister Le Maire threatens the German industrial group with the forced sale of a ship engine plant because he accuses the VW subsidiary MAN of breaking contracts with France’s navy. And the Canadian company Couche-Tard had to learn that foreign companies are not welcome even in supposedly less sensitive industries: the retail group recently wanted to take over the supermarket chain Carrefour, France’s largest private employer, and it promised to invest billions. Le Maire however vetoed in the name of “food sovereignty” – as Couche-Tard endangered the supply of the population. The Carrefour case shows that large takeovers would have become impossible until the election in spring 2022.
In recent years, several European countries have increased their control over foreign investment, including Germany. In Macrons France, however – where the sale of several industrial groups in recent years has been viewed as a shameful impotence – the list of takeovers requiring approval was particularly long. A new law declares almost everything to be a “protected” industry, from the energy industry to the food industry to the media. Analysts at Alpha Value recently made the calculation: 83 percent of the sales of the 40 largest listed companies in France are now subject to some form of government control.
Macron and Le Maire see no contradiction between what they say and what they do. The Europeans shouldn’t be naive, they argue. After all, the US and China are also aggressively defending their companies. “In times of crisis it is not illegitimate for the state to regain its role as protector,” says Le Maire. The president, in turn, is convinced that investors are now primarily interested in the economic stimulus program, which he says will fundamentally modernize France’s economy.
An upswing would help in the near future. Since there is no end to the pandemic in sight, it should take even longer in France – the country is not exactly competitive when it comes to vaccination. Macron is nevertheless optimistic: If possible, he wants to meet with foreign CEOs again this summer. Then again in real life.
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