By William Horobin
PARIS--French President François Hollande has to deliver on
promises to make the country a more attractive place to do
business, or face losing out in the race to lure foreign
investment, a group of executives at foreign firms said
Wednesday.
The warning was delivered by around 90 executives who head the
operations of multinational companies in France.
Meeting in Paris, the executives said their bosses at firms from
Swiss pharmaceuticals giant Roche Holding AG to U.S. tech firm
Hewlett-Packard Co. are waiting to see the results of Mr.
Hollande's plans to stimulate business in France.
"We are confronted with global chiefs who just want to believe,"
the executives said in a manifesto, published in French business
daily Les Echos ahead of the conference. "But they will only do
that when France carries out its promises and shifts from words to
deeds."
The call for action comes a year into Mr. Hollande's attempt to
rebrand himself as a pro-business leader and thwart naysayers who
claim France is to rigid and complex a country to invest in. It is
an attitude that government officials have referred to as "French
bashing."
With economic growth hovering just above zero since he took
office in May 2012 in contrast with faster growth in Europe's other
major economies like Germany and the U.K., France's socialist head
of state is under pressure to act.
Investment by nonfinancial companies dropped in 2013 and has
continued to fall every quarter this year. In terms of foreign
investment projects, figures from Ernst & Young show that
France made up some ground last year but still remains below the
2010 level and is falling behind Germany and the U.K.
Mr. Hollande wants to lure investors with cuts to labor taxes,
which he argues will encourage investment and recruitment. His
government has also embarked on a simplification drive to reduce
paperwork for employers, and has pledged to stop creating
retroactive taxes that discourage companies from taking investment
decisions.
But executives at Wednesday's meeting say France is still
lagging behind international rivals. Many pointed to the slow
implementation of the tax cuts for business, which were originally
announced in 2012 but had no impact until this year and won't come
into full force until 2017
"I'd rather there was less communication and more concrete
action," said Patrick Desbiens, who heads the French operations of
U.K. drug maker GlaxoSmithKline PLC.
A survey published to coincide with the conference corroborates
the concerns about France's image. Only 10% of 112 foreign
companies in France surveyed by Ipsos think France has become a
more attractive place to do business over the past year, and 55%
think that the country has become less attractive. Over 90% said
the government isn't moving fast enough.
Delegates at the conference also singled out France's rigid
labor laws and complex negotiations with unions as particular weak
points. Despite a nationwide agreement in 2013 between unions and
employers to streamline redundancies in France, greater flexibility
is still needed, the executives said.
"The [lack of] attractiveness of France on social matters
remains our Achilles' heel," the executives said in the manifesto.
"In the day-to-day reality for our businesses, there has been no
significant progress."
Christian Nibourel, who heads the French operations of
consulting firm Accenture PLC, said France stands out as a problem
case in his company. When Accenture launched a reorganization of
its business earlier this year to create a new structure for its
digital unit, it took France six months longer than the rest of the
world.
"It is the same time every time. It is an image problem, and it
creates operational difficulties," Mr. Nibourel said.
Write to William Horobin at William.Horobin@wsj.com
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