France extended its lead over major European rivals in an annual ranking of destinations for foreign investment, giving French President Emmanuel Macron a boost as he tries to emphasize his economic achievements after a politically damaging struggle to reform the pension system.
The number of new projects in the country rose 3 percent last year, supported by money going into research and development, and sectors undergoing transformation such as electric vehicle production, Ernst & Young said.
Elsewhere, Brexit continued to weigh on the UK’s fortunes, while high labor costs and difficulties entering industrial supply chains penalized Germany, the consulting company said.
However, the pace of job creation resulting from foreign investment was lower in France than in Germany, the UK, Spain and Italy, Ernst & Young said.
Such projects created about 38,000 jobs in France last year, compared with close to 47,000 in the UK.
Macron’s government has highlighted France’s strong performance in the ranking since he first took office in 2017 as evidence that his often unpopular reform agenda is paying dividends.
He plans to hammer that message in the coming days, presenting a bill to boost green industry and convening an annual summit with foreign business leaders in Versailles, outside Paris.
He is also due to unveil a 5.2 billion euros (US$5.68 billion) investment by Taiwan’s ProLogium Technology Co (輝能科技) in a new electric battery plant in northern France.
“We have demonstrated that we have the capacity to take decisions, solid institutions and the ability to pass reforms, even unpopular ones,” Macron said in an interview with Challenges magazine published on Wednesday.
The French leader still has his work cut out to turn the page on months of anger over his decision to raise the retirement age, which has hurt his popularity and cemented his struggle to find a majority in parliament to pass reforms.
Last month, Fitch Ratings cut France’s credit rating, saying budget deficits remain wide and that the pensions overhaul would only have a moderately positive effect.
It also said that political deadlock and sometimes violent protests pose a risk to Macron’s reform agenda.
The survey showed that investors are also more concerned about the medium-term outlook for the French economy, with only 53 percent saying the country’s attractiveness would improve in the next three years, down from 74 percent in 2021.
“The political and social tensions may have led international business leaders to question the capacity of the government to continue reforms that improve competitiveness, reduce debt and the trade deficit, support investment in ‘Made in France,’ and also invest in health and education infrastructure,” Ernst & Young said in its report.
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