Foreign investors in France are becoming increasingly concerned


“We raised the pen.” This manager of an investment fund in Paris, who wishes to remain anonymous, sums up the state of mind that is running through economic circles in the current political context: wait and see how the situation will evolve. The risk of strong instability following the second round of the legislative elections, on Sunday, July 7, is generating both concern and a wait-and-see attitude among French and foreign investors. A feeling reinforced by the statements of Emmanuel Macron himself, before the first round, saying he fears a ” civil war “ in the country in the event of the National Rally (RN) or the New Popular Front (NFP) coming to power.

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To our knowledge, no investment or industrial development project has been cancelled or postponed at this stage, but many entrepreneurs are looking to the future with apprehension. “Many investors with whom we have spoken in recent days are both worried and attentive to what is happening or could happen in France. We are in a complete “wait and see” situation.”admits Pascal Cagni, head of the investment fund C4 Industries.

Yet less than two months ago, foreign investments were raining down on the country, a record announced at the Choose France forum, held in Versailles on May 13. Nearly 15 billion euros of investments were welcomed by the Head of State himself, with twenty-eight projects in total, including some supported by American giants Microsoft, Amazon, Pfizer, etc.

Concern is growing among SMEs

None of these groups have commented since the announcement of the dissolution of the National Assembly. But uncertainty is not a good advisor in this universe. “Political instability can disrupt financing and business continuity, making France less attractive. Investors prefer predictable and stable conditions”explains Antoine Moyroud, partner at Lightspeed Venture Partners, a Silicon Valley fund that has invested in several French start-ups such as Mistral AI.

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Concern is also growing among SME bosses. A survey by the Confederation of Small and Medium-Sized Enterprises, conducted before the first round of the legislative elections and published in The echoes June 27, indicates that 35% of the 1,066 SME and VSE managers surveyed consider political stability as “priority” and 47% fear a drop in activity in the coming months. A climate that is all the more tense since, according to the barometer of The New Factorymade public on June 27, French reindustrialization is ” struggle “Since the beginning of the year, factory closures or threats of closure (thirty-seven in total, according to the monthly’s count) have exceeded openings (twenty-three), a first since the Covid-19 crisis in 2020.

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