Sovereignty, reindustrialisation, planning : since the pandemic, presidential rhetoric has taken a strange statist inflection. Faced with globalized chaos, the time has come to protect the French productive fabric and defend national flagships. At the same time, the presidential majority continues to praise the attractiveness of France for foreign capital. Communication from the Élysée is full of praise for this policy, which would combine openness to the world and industrial planning, by multiplying “publicity stunts” – recently, the purchase of Arabelle turbines from the American giant General Electrics. The reality says something completely different. In 2017, the share of industry in GDP was 13.8%; it had fallen to 12.7% in 2022. Highly strategic companies continued to be bought by foreign powers. And state subsidies, supposed to propel the sectors of the future, mainly consisted of a massive transfer of public money to private capital – without conditions.
Emmanuel Macron’s record was poor, even before his election. Minister of the Economy in 2014 and 2015, he sold the “energy” branch of Alstom to General Electric when alternatives existed. The loss of industrial sovereignty was considerable: factories and patents to produce turbines for nuclear power plants, hydroelectric dams and gas plants, offshore wind turbines and equipment for electrical networks had been abandoned to the Americans. The rest is known: job cuts in all branches, closure of several sites and return – with pain and at the cost of a loss of sovereignty – of the capacity to produce Arabelle turbines. But this example is not the only one: the companies Technip, Ecopla and Gad are paying the price for Minister Macron’s lack of interest in industry.
This was no coincidence: his 2017 program did not mention industry. There start-up nation held out a whole new horizon to “entrepreneurs”: “innovating” to sell a concept to large companies (preferably American) and becoming a millionaire without having produced anything.
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The Covid pandemic has shown the strategic weakness of a country which no longer has the capacity to produce objects useful for daily life or for the operation of production chains. What was President Macron’s reaction? Vibrant speeches, the addition of the concept of “industrial sovereignty” in the title of the Minister of Economy and Finance, and enormous tax cuts adding to the previous cuts decided since 2014.
The number of companies carrying out activities relating to the “fundamental interests of the nation” acquired by foreign capital is increasing every year: 124 in 2021, 131 in 2022 and 135 in 2023
A certain industrial policy has indeed been put in place, based on the prioritization of certain sectors deemed strategic. This selection is, at best, questionable. Hydrogen is an energy sector whose production-transport-use cycle is not compatible with the imperative of energy sobriety. Battery factories, despite the generous subsidies they have benefited from, are not competitive with Chinese or American production in a globalized market. As for quantum: is it the priority, when French people can no longer treat themselves due to a lack of antibiotics and when curare was lacking in 2020 for intensive care units?
Beyond these questionable choices, the “industrial” shift in the president’s policy does not shine in its results.
Industrial plunder disguised as “attractiveness”
Supporters of the presidential majority never stop praising the “attractiveness” of France for foreign capital. Behind this apparent good news, we must read the acquisition of French companies by billionaires and foreign pension funds. Vallourec, a manufacturer of steel tubes for energy infrastructure, was acquired by the Apollo fund, based in the United States. Peugeot Société Anonyme (PSA) was de facto bought by the Italian Fiat and its headquarters set up… in the Netherlands! As for Exxelia, an SME producing very high-tech equipment for the Rafale, medical or telecommunications, it was acquired by an American company…
The 2023 annual report of the General Directorate of the Treasury, responsible for monitoring foreign investments in France, can only be worrying. In 2023, no fewer than one hundred and thirty-five foreign investments were authorized, relating to companies contributing to the “exercise of public authority” or likely to “undermine public order, public security or the interests of national defense”. 67% of these investments come from a State outside the European Union.
If the General Management wants to be reassuring by indicating that it has imposed conditions on sixty of these investments, these are, at best, very limited. They cannot, for example, relate to the maintenance of employment in France. And it must be added that foreign investments in strategic sectors go well beyond a simple legal change of ownership: the potential transfer of information or technologies to a foreign country is considerable. And we are all too familiar with the industrial espionage practices of the Chinese Communist Party and the United States administration, intimately linked to their large companies, and aware of all their foreign investments.
While around one hundred and thirty “strategic companies” are acquired by foreign investors each year, how many investments are blocked? Only two since the creation of the system.
The number of companies carrying out an activity relating to the “fundamental interests of the nation” acquired by foreign capital increases each year: 124 in 2021, 131 in 2022 and 135 in 2023. And before 2021? The mystery remains: these redemptions were simply not counted. We can certainly give the government credit for having published an annual report making it possible to document the loss of industrial sovereignty in areas relating to the “fundamental interests of the nation” – the PACTE law created the obligation to do so.
While around one hundred and thirty “strategic companies”, according to the administration’s categorization, are acquired by foreign investors each year, how many investments are blocked? Only two since the creation of the system: the defense optronics specialist Photonis and the companies Velan SAS and Segault, manufacturers of valves for nuclear power (both French subsidiaries of the Canadian group Velan). But if foreign investments are likely to harm “public order” or the “interests of national defense”, according to the terms of the annual reports on industrial sovereignty, why not prohibit more of them? Behind the “sovereignist” rhetoric of the Élysée, it is the abandonment of industry to the unleashed forces of the market that persists.
Private subsidy registered in industrial planning
Another argument put forward by the presidential majority: the state budget was used to limit the deindustrializing pressure of free trade. Tax expenditures (€20 billion per year), reductions in social contributions (€90 billion per year) and production taxes (€10 billion per year) explicitly aim to strengthen the competitiveness of companies and in particular that of exposed industrial companies. to international competition. The State also launched the France Relance and France 2030 plans following the Covid pandemic, with 100 billion euros and 54 billion euros respectively. Massive subsidies were awarded to companies expressing their willingness to receive them – often with no other condition than not being in difficulty. If Bruno le Maire continues to assert that reindustrialization is underway, macroeconomic aggregates demonstrate the opposite: the share of industry in GDP fell from 13.8% in 2017 to 12.7% in 2022.
Prime Minister Gabriel Attal announced in his general policy speech on January 30, 2024 that “our industry is coming back with 100,000 industrial jobs created and the reopening of 300 factories!” 100,000 jobs created – of varying durability – for several hundred billion euros in public aid: a reason for celebration or further manifestation of the collusion between the presidential majority and financial interests?
Behind these fanfare announcements, a reality remains: the wave of relocations suffered by France continues to strain its productive fabric. Due to the structure of its economy, it is particularly exposed: very large companies (more present in France than elsewhere) have an additional propensity to relocate than those of intermediate size. Who can doubt that a real policy of reindustrialization will require a balance of power with its owners?
Notes :
Link to the article https://lvsl.fr/rachat-des-turbines-arabelle-la-soumission-francaise-aux-etats-unis-continue/
If the State has acquired a preferred share of the company, the associated rights in no way prevent the company from being subject to the extraterritoriality of American law, and in particular to the ITAR (International Traffic in Arms) regulations. Regulations)
https://www.tresor.economie.gouv.fr/Articles/c7ec36f3-6df0-4cf8-82aa-9c772917afeb/files/249123ae-5a3b-45dd-8f6f-5f84b2fc0c0a
Investments subject to the administrative police of foreign investments in France relate to sectors such as defense, cybersecurity, security or continuity of energy and water supply, operation of transport networks and services, protection of public health, or food safety, and investments in research and development activities related to them and which concern certain critical technologies or dual-use goods and technologies.
https://www.lesechos.fr/finance-marches/ma/lexecutif-a-bloque-pour-la-premiere-fois-un-investissement-etranger-1277655
https://www.usinenouvelle.com/article/bercy-bloque-definitivement-la-vente-de-segault-et-de-velan-sas.N2179877
“Reindustrialization: how to involve French multinationals? », http://www.cepii.fr/blog/fr/post.asp?IDcommunique=919
