Concerns are mounting among French business leaders regarding the nation’s economic outlook following recent political changes. Patrick Martin of Medef and François Asselin of the Confederation of Small and Medium Enterprises emphasize alarming trends, including a significant drop in foreign investments and a record number of bankruptcies. They urge the government to take immediate action to support businesses, fearing that political instability and rising international competition could jeopardize France’s economic stability and growth.
Concerns Rise Amid Economic Uncertainty
In the wake of recent government changes, prominent business leaders in France are expressing deep concerns about the nation’s economic trajectory. Patrick Martin, president of Medef, shared his apprehensions in an interview with the Journal du Dimanche, highlighting the potential consequences of recent political censorship. His sentiments resonate with François Asselin, head of the Confederation of Small and Medium Enterprises, who echoed similar worries in the same publication.
Worrying Economic Indicators
Martin pointed out that French companies are grappling with “challenging economic realities” that seem to be overlooked by politicians. He cited alarming statistics: nearly half of foreign investors interested in France have either postponed or canceled their investment plans. Additionally, the country is facing a historic high of 66,000 bankruptcy filings this year. “The ongoing deindustrialization of France persists, despite attempts to reverse it,” he stated, referencing the slowing down of key sectors such as chemicals, steel, and automotive industries.
Asselin lamented the loss of “stability, visibility, and readability” that entrepreneurs need to thrive, fearing that the recent political shifts could lead to declines in investments, hiring, and overall business activity. “While some may find amusement in political games, they are jeopardizing the livelihoods of our businesses,” he remarked.
Both leaders call on elected officials to remain composed and urge the future government to confront the economic challenges directly. Martin proposed immediate support for the construction sector through “building stimulus measures” and advocated for tax relief for businesses, such as the ongoing CVAE adjustments, emphasizing that increasing labor costs must be avoided. “I urge our political leaders to recognize the fragility of our situation and the fierce international competition we face,” he emphasized, insisting that the state should cease its financial drain on businesses.
Asselin concurred, stressing the necessity for comprehensive reforms in public action. “It will be a daunting task for anyone to undertake, regardless of their political affiliation. Without action, the country risks collapse,” he warned. He dismissed any apocalyptic views, instead describing the current situation as a “slow poison” affecting France that requires immediate attention.
These warnings come amid the backdrop of political instability following Barnier’s government fall, raising alarms among economic stakeholders. The increasing international competition, especially with the United States, adds to the urgency. Rating agencies have also raised concerns, with Fitch noting that the fragmented National Assembly complicates efforts for budget consolidation. Meanwhile, Moody’s pointed out that the recent censorship could hinder public finance consolidation in France, exacerbating the country’s political stalemate.