Political instability weighs on the attractiveness of France

“An investment is a bet on the future.” This is what Philippe Waechter, director of economic research at Ostrum Asset Management, readily points out. However, explains the latter, “France has entered a period of political instability. Companies are putting their foot on the ball and waiting to see what regulatory, tax and policy decisions will come. Today it is very difficult to say which path France will take in five years.” For the moment, investment decisions are therefore postponed. The survey carried out among 200 managers of foreign companies established in 25 countries reveals that half of them have reduced their projects in France. For 84% of them, decisions have been postponed, at best, to 2025. To explain this reduction in size, investors cite several immediate reasons. Firstly, in the midst of a budgetary slump and while France is on the verge of political chaos, legislative and regulatory uncertainties (59% concern rate) and the difficulty of building lasting business plans. The slowdown in reforms appears in second position, cited by 47% of respondents (administrative simplification, pensions, reindustrialization, etc.) with the questioning of public policy choices in key sectors (40%). Then come concerns about the budgetary and economic situation of the country and the cost of labor (between 20 and 30%).