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France

Sarkozy says state to lead French industrial renaissance

Text by News Wires

Latest update : 2010-03-04

France’s President Nicolas Sarkozy harked back to the best tradition of French dirigisme on Thursday as he unveiled policies aimed at tightening the government’s hold on state companies and reversing the decline of French industry.

REUTERS - France will play a more hands-on role in managing its state shareholdings, President Nicolas Sarkozy said on Thursday as he unveiled policies aimed at halting the decline of French industry. 

Sarkozy also said he would earmark millions of euros to encourage companies to innovate with green investment and bring jobs back to France as part of a plan to help a sector that has shed over half a million workers in the last 10 years.
 
"The state is going to profoundly review its role as a shareholder in the big industrial companies," he told workers at a Eurocopter factory in southern France.
 
Sarkozy said the government would from now on have two representatives in companies with state shares. The bosses would also be expected to meet twice a year with the government to discuss their strategies, investments and results.
 
The government owns stakes in some of France's largest companies, including carmaker Renault, utilities EDF and GDF Suez and nuclear firm Areva.
 
Sarkozy already keeps a close eye on these companies' policies. In January, he persuaded Renault executives to keep some production of its Clio 4 car in France, despite a plan to move it all to Turkey.
 
The unveiling of the industry plan coincided with a report showing that unemployment jumped to 10 percent in the fourth quarter, its highest level in 10 years, a worry for Sarkozy's centre-right party ahead of regional elections later this month.
 
German competition
 
France was the world's fifth largest exporter last year but French companies have faced growing difficulties remaining competitive on the world stage.
Sarkozy has frequently blamed the strong euro.
 
"Our industries have lost around 50 percent of their competitiveness for the totally artificial reason of the weakening of the (U.S.) dollar while the euro has strengthened," he said again on Thursday.
 
He also said the EU's competition policy was preventing the creation of large European companies and urged looser rules.
 
But French companies say they are often tempted to move their production abroad to escape higher costs and strict labour rules at home.
 
Analysts also make comparisons with neighbouring Germany where flourishing industrial exports have led to a trade surplus in contrast to the huge deficit in France.
 
They say France is not innovative enough, does not position itself well for client needs, and is stuck with the idea that the economy's future is in services, not manufacturing.
 
In a deal that came to symbolise some of the problems, a consortium led by EDF, GDF Suez and including Total and Areva, was dealt a blow in December when the United Arab Emirates picked a South Korean group to build four nuclear reactors.
 
"The contraction of our industrial base is the result of...a priority given to investment abroad...and the idea that we are now a post-industrial economy," said Andre Gauron, economist at the Cour des Comptes, France's top economic watchdog.
 
Industry only represents 16 percent of GDP in France compared to around 30 percent in Germany. Sarkozy said he wants a 25 percent increase in industrial output between now and 2015.

 

Date created : 2010-03-04

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