In 2020 foreign investments have declined all over the world, because of the pandemic. France nevertheless remains the most attractive European country according to the annual barometer published in aujou ...

France narrowly retains its first place in Europe for foreign investment

Audio 00:04

The Minister of Finance Bruno Le Maire.

By: Dominique Baillard Follow

5 mins

In 2020 foreign investments have declined all over the world, because of the pandemic.

France nevertheless remains the most attractive European country according to the annual barometer published today by the firm E&Y.

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A notable resilience, but very disputed: with 985 investment projects announced last year, France retains its leading position, but the United Kingdom is neck and neck and Germany not very far behind.

This first place remains significant.

Foreign leaders have not lost confidence in France,

" notes Marc Lhermitte, vice-president of E&Y.

They are mostly convinced by the recovery plan.

In the sectors driven by the Covid-19, commitments are exploding.

Over 30% in health.

Activities related to domestic life are also on the rise.

Furniture, e-commerce and the food industry are the main beneficiaries.

The downside: foreign investments have fallen more in France than in other European countries

Indeed in Germany the number of promises fell by 4% only while it is -18% for France.

For the observed group, the 27 members of the EU, plus the United Kingdom and Turkey, the drop is 13%, so France is struggling.

According to Marc Lhermitte there too, it is an effect of the covid.

Because the hexagon is home to many industries directly affected by containment, such as the automobile, aeronautics or tourism.

Hence the economic magnitude of the downturn.

Have the rhetoric about the need to relocate turned into action?

Yes at European level, but not necessarily in France. The large groups realized in 2020 how fragile the value chains were and they are therefore seeking to bring production closer to their European customers. But they remain obsessed with costs, especially since their margins have crumbled in 2020? They therefore favor countries where labor is still cheap. Poland benefits and Turkey too. Two countries where foreign investment against all odds is on the rise. Portugal has also remained an attractive destination for foreign investors, the level of projects is barely falling, Lisbon confirms its vocation as a back office, for financial services for example.

In the future, a majority of executives interviewed by E&Y plan to bring part of their activity back to the national territory.

But only one in five in the near future. This desire to repatriate is indisputable, but is it the right time? “

While the market is moving back to Asia, to the United States, isn't it counterintuitive to come back to Europe where the market has not quite woken up yet?

". Given that relocation to France involves higher costs and therefore higher final prices, made in France will be emulated on the condition that it is deemed relevant in commercial terms. If the consumer is "ready to pay the price of made in France" companies will come. But the global context is harsh, because at the moment Marc Lhermitte reminds us, “

all countries are storming sovereignty and made in

And then the urgency for business leaders is to rebuild their margins, to get off to a good start.

Foreign investors welcome the pro-business reforms already carried out in France, and they retain "

a desire for France

" but their return to the level before the pandemic is not in sight before 2022.

IN SHORT

Morocco partially reopens its borders from June 15

In a week and a day, expatriates living in Europe as well as tourists will be able to return without constraint to the Shereefian kingdom.

Including by sea. Provided of course to present an anti-covid vaccine or a negative test.

The 27 are on the list of countries considered safe.

But nationals of 74 other countries remain subject to more draconian conditions, including India, South Africa, and Algeria.

The semiconductor shortage will have to wait until 2022

This is the most pessimistic forecast to date and it comes from Flex, the world's third-largest user of these critical components found in both cars and IT equipment.

Today the economy - France narrowly retains its leading position in Europe for foreign investment

France narrowly retains its first place in Europe for foreign investment

The downside: foreign investments have fallen more in France than in other European countries

Have the rhetoric about the need to relocate turned into action?

In the future, a majority of executives interviewed by E&Y plan to bring part of their activity back to the national territory.

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