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Macron gathered 200 of the world's biggest entrepreneurs in Versailles for the Choose France forum.
France holds first place in Europe in attracting foreign investment, and for the fourth year in a row. The analytical agency Ernst & Young notes that between 2017 and 2021, foreigners launched 6,910 projects in France, creating 182,900 jobs. Last year, the same agency counted 1,259 investment projects, and importantly, 40 percent were investments in industry.
Back in 2018, Macron conceived of a business summit called "Choose France." It was supposed to be held in winter, before Davos, and to discuss the main areas of investment in French industry. But the pandemic had other plans. The current forum, which brought together two hundred leaders of the largest companies in the world, opened in Versailles. Half of the participants were Europeans, 20% came from North America and 15% from Asia.
Here are some results and impressive figures. A solar cell factory will be built in the Moselle department. The investment is 710 million euros, plus the creation of 1,700 jobs. One of the main shareholders is Siemens. "For years we have subsidized the production of foreign batteries, now we will use and sell our own," said the French Minister of Industry.
In Dunkirk, the Taiwanese ProLogium group will build a battery factory for electric cars: 5.2 billion euros, 3,000 jobs. Company president Vincent Yang wanted to build in the U.S., given Biden's tempting offer formulated in the Inflation Reduction Act (IRA, about that later), but ended up choosing France because of its new approach to nuclear power: "We need quality electricity – cheap and environmentally friendly," he explained.
Also in Dunkirk, the Chinese STS is investing 1.5 billion with the French in the production of lithium batteries, which are now needed everywhere. 1.5 billion, 1,700 jobs. British startup Newcleo will build a small modular nuclear reactor for $3 billion. Ikea will create a new logistics center in Toulouse; Pfizer will shell out half a billion for new oncology research. Ilon Musk did not name specific figures, but intriguingly stated, "I am impressed by the attention paid to industrial development here, and I am confident that Tesla is ready for serious investment." A total of 28 projects for 8,000 jobs have been approved at this forum alone, so Macron's idea is understandable.
Loïc Le Floch-Prigent is not the last man in the French business establishment. He ran the oil giant Elf-Aquitaine, the state-owned Gaz de France, and the National Society of French Railways. "Macron is completely disconnected from reality," he believes. – "The president understands nothing about industry and does not know how it works. Industry is not developed by money, by subsidies, by smart people who say: do this and don't do that. This is "green," and this is not. It develops when people want to do something they can't do because they are hindered by administration, local authorities, texts, regulations, controllers, activists of all stripes. And they just need to stay out of the way and it will work."
But they are not foolish people in Versailles either. What attracts them to France?
"The time when Chinese slaves produced cheap stuff for the French unemployed is over," says Jean-Pierre Robin, an economic columnist for Le Figaro. And France's Minister of Economy and Finance believes that "we accelerated inflation by moving industry to cheap countries and sharply chased a carbon-free economy."
"Even if we tame inflation, caused by the surge in demand after the pandemic, the complete disruption of global production networks, the irrepressible creation of financial bubbles in the 2010s, the impact of events in Ukraine, we will never get back to the global inflation rate of two percent that has settled in Europe, the United States, even China," Robin says. – "From now on, it will take months, if not years, to negotiate with investors to get any serious investment."
Until about 2015, France was not at all interested in investors. But since 2017, that is, since the beginning of Macron's first term, things have suddenly shifted. "We are seeing lower corporate taxes, lower compulsory social benefits, and labor market reforms," notes Mark L'Hermite, an Ernst & Young expert.
And scientists, the developers of innovations, were given a tax deferment. Since 2010, the cost of cheap labor has decreased significantly, and it is in demand in the early stages of the formation of industrial enterprises. France was significantly losing to its competitors precisely because of the administrative disaster and the cost of labor: because of this, the country created half as many jobs as its neighbors.
The "Green Industry" bill just announced proposes spending 700 million euros to develop and educate people for the "professions of the future." Make it as easy as possible to approve industrial projects, or invest a billion in land allocation for industrial facilities. Add to this a skilled workforce and a good geographical location for re-export.
Ironically, Brexit also helped France's investment popularity. Britain has traditionally attracted foreign capital, but "now it is becoming increasingly difficult for London to convince business leaders to invest in the United Kingdom and then re-export to Europe because there are so many logistical and administrative problems," says Mark L'Hermite. The number of foreign investment projects in Britain fell by 6 percent last year.
Macron could not oppose the American Inflation Reduction Act, that Biden signed in August 2022. It provides an unprecedented $350 billion in benefits to businesses that, while complying with the strictest modern environmental regulations, will locate in the U.S. or invest in the American economy.
From the EU's point of view, this is a rather aggressive move on the part of the allies. Marc L'Hermite believes that "the Europeans must react instantly and work as clearly and openly as possible to deter those who have now decided to invest in our economy."