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Multinationals put France 'under surveillance'

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Multinationals put France 'under surveillance'
The French Ministry of Finance needs to take note, say top execs. Photo: AFP
10:30 CET+01:00
Top executives from 50 foreign multinational corporations in France rung the alarm bells this week claiming the country's business environment is pushing foreign investors away. They appealed for the Socialist government to take action.

The heads of the French wings of such giants as HP, Accenture, Microsoft and Volkswagen, say they have had increasing difficulty convincing their parent companies based abroad to invest in France.

In a commentary, published by business journal Les Echos and signed jointly by the execs, the multinational bigwigs urge changes to improve the business climate, while warning that France is “under observation”, suggesting that current activities could be curtailed if not shut down unless the situation improves.

The executives, including Christian Nibourel from Accenture, Gérald Karsenti (HP), Christophe de Maistre (Siemens) and olivier Campenon (British Telecom Global Services), note that 20,000 foreign companies have French operations, employing two million people.

But these operations are in jeopardy because they are exposed to “incredible competition not only from emerging countries but also from mature countries which have placed the imperative of competitiveness and attractiveness at the heart of their policies”.

The executives said that steps the Hollande government has taken, such as its “pact for competitiveness and jobs” and incentives for entrepreneurs, go in the right direction but are not enough.

In a highly competitive environment, businesses in France are penalized by “the complexity and instability of the legislative and regulatory environment,” the group said.

They also suffer from the lack of flexibility in labour laws and the complex, long-winded procedures involved when a company restructures its organization, the executives said.

In a blog for Les Echos Francois Vidal argued that France is under close surveillance from big business.

"It is not just rating agencies have put France under observation. The directors of major corporations are also watching our country with a growing mixture of puzzlement and concern. France now suffers from a downgrading.  

"Why ? Well because seen from New York , Tokyo , Munich and Atlanta, it is more difficult to see France as a haven for investment."

Among other measures, the execs' appeal called for more a stabilization of tax rates and the elimination of “retroactive” taxation.

They also wants the government to examine studies accompanying each piece of proposed legislation to “evaluate the consequences on international investment”.

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