Minister responds to Newsweek article on French economy

Economic policy/France’s attractiveness – Article by Mme Hélène Conway-Mouret, Minister Delegate for French Nationals Abroad

Paris, 15 January 2014

No, France is not a country in decline

What has got into Janine di Giovanni? In the 3 January edition of Newsweek, the journalist takes a simplistic and distorted look at France that would not look out of place in some of the British tabloid press. Her remarks are laden with anecdote, cliché and approximation. This kind of French-bashing is astonishing coming from a journalist who I know is fond of our country, as the fact that she has chosen to live here proves. So I would like to provide her with a few clarifications based on facts and figures rather than feelings.

The American company directors I met during my last visit to the United States have chosen to invest in France because they find it a favourable and stable environment: a skilled workforce, modern infrastructure, an ability to innovate and a good quality of life for their staff. So it’s no accident that France still ranks number four in the world for its ability to attract foreign investment. Newsweek claims that France’s economic lifeblood is abandoning it. Nothing could be further from the truth. Proof of this is that the rate at which our compatriots emigrate, temporarily or definitively, for professional or personal reasons, is slowing down. We have gone from -4% per year over the last 10 years to +1.5% on average for 2012 and 2013. Convinced that international mobility presents an opportunity, French people are continuing to seize the chances offered to them abroad. However, the great majority of them come back armed with experience and new skills. Many also excel through their talents in a wide variety of fields. They strengthen the positive image of an innovative, modern, illustrious France. Many succeed, and they are all vehicles for our language, culture, expertise, goods and services. This is true of Newsweek’s new owner, Etienne Uzac. The online media outlet believes France is a country in decline. However, it is Europe’s second-largest and the world’s fifth-largest economy, and the world’s sixth-largest exporter of goods. It ranks first in Europe for the aerospace and nuclear industries, second in chemicals and third in agrifoods. It is the world’s leading tourist destination (83 million tourists), Europe’s top country for start-ups (550,000 in 2012), second in the world for quality of life, and fourth for the hourly productivity of its workforce, whose cost is lower than in the Netherlands, the United States and Germany (1).

France is supposedly not attractive any more. And yet it is the top destination for foreign investment in industry and logistics and the top country for welcoming job-creating American investments, as well as for public support for R&D. It has more than 20,000 foreign companies employing two million people (13.5% of employees), a quarter of them in the industrial sector alone, which accounts for 33% of exports and 29% of R&D. It is also a highly prized destination for foreign students.

France supposedly no longer offers any future prospects. And yet its infrastructure and public services are unrivalled in the world. It has a higher broadband penetration rate (35.5%) than Germany (33.8%) and the United Kingdom (33.6%). As regards innovation, France ranks sixth in the world for filing patent applications.

Even so, I am not ignoring our country’s difficulties, especially when it comes to jobs. The first challenge we are busy taking up is the return to sustainable growth by improving, among other things, our competitiveness. Our administrative procedures and tax system will be reformed with the choc de simplification (2) to make them simpler, more efficient and thus more understandable to citizens.

The government has carried out reforms to get the country back on its feet and support businesses. Let me mention two examples: the competitiveness and employment tax credit (CICE) and the innovation tax credit. Finally, the President has just announced a Responsibility Pact with businesses which makes provision, by way of compensating for job creation, for lower employers’ social security contributions. The Foreign Ministry, like every ministry, is mobilized to support our businesses, make them known, boost our exports as part of comprehensive efforts to increase France’s global offer. All this throws new light on France’s actual economic and social situation, far from the simplistic, distorted satirical tracts some people give us to read./.

(1) KPMG guide, “Competitive Alternatives”, 2012.

(2) A series of measures aimed at simplifying administrative procedures, cutting red tape that is hindering business, and boosting growth.

Published on 20/01/2014

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