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France tops list of Europe destinations for foreign R&D, industrial projects

Ludovic Marin, AFP | French President Emmanuel Macron speaks as he visits Station F startup campus in Paris, on October 9, 2018.

France chalked up the biggest number of manufacturing and R&D projects by foreign investors in Europe last year, a report said Tuesday, boosting President Emmanuel Macron's claim the country is increasingly open for business.

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The EY consulting firm counted 144 major research and development deals -- an 85 percent surge from 2017 -- and 339 manufacturing projects, pushing France past Germany or Britain for the first time.

Even though the total number of foreign direct investment (FDI) deals rose just one percent to 1,027, "France can take comfort from the fact that FDI did not decline by the extent it did in other European economies," the report said.

Britain, beset by Brexit woes, barely clung on to first place in terms of the total number of foreign investment projects, slumping by 13 percent to 1,054.

Macron was quick to seize on the attractiveness rankings, writing on Twitter that "France is a leading economy open to foreign investors and talents."

Many executives and government officials had worried that the outbreak of "yellow vest" anti-government protests last year would cool enthusiasm for France.

The weekly demonstrations often spiralled into rioting and clashes with police in Paris and other cities, though the protests have faded markedly in recent weeks.

The EY report found that Paris currently remained the most attractive European city for foreign investors, surpassing London and Berlin, though just 30 percent of businesses backed the City of Light, down seven percentage points from last year.

But the protests have nonetheless stalled Macron's push for widespread economic overhauls aimed at boosting economic growth while cutting into its debt load.

Just 30 percent of respondents thought France's attractiveness would improve over the remaining three years of Macron's current presidential term, down from 56 percent last year.

"The gilets jaunes (yellow vests) movement raises questions about France's ability to enact the reforms necessary to boost its business attractiveness," the report warned.

Overall in Europe, the number of foreign investment projects across Europe fell four percent last year, to 6,356.

And while Western Europe remains the most attractive region for investment, Britain's chaotic exit from the EU remains the biggest risk, with 38 percent of investors worried about its consequences on growth and trade.

As a result, just 27 percent of respondents plan to establish or expand operations in Europe this year, down from 35 percent last year, EY found.

(AFP)

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