February 2018

By Mathilde Defarges

Mathilde Defarges is Co-Founder and President of Blue Star Strategies SAS, serving clients in Paris, France and Brussels, Belgium.

This January in the Palace of Versailles, French President Emmanuel Macron hosted 140 global business leaders at the “Choose France” Summit, a government-led initiative designed to attract €3 billion in foreign investment over the next five years. The next day at the World Economic Forum in Davos, Switzerland, Mr. Macron told world leaders that “France is back.”

The #ChooseFrance initiative has already drawn major international investors such as Toyota, SAP, Facebook, Google, Novartis, Manpower, and General Mills to announce new investment projects.

What can we make of Choose France? Is it merely a PR exercise, as some have protested? To answer that question, one needs to look at Mr. Macron’s larger vision.

At Davos, President Macron spoke of “Globalization…undergoing a major crisis” and the corresponding need to promote a new “global contract” based on three commitments: “the duty to invest, the duty to share and the duty to protect.” This concept echoes Mr. Macron’s domestic slogan: “Libérer et Protéger” (“to liberate, and to protect”), conceived and framed as a safeguard against populism. At the French American Foundation in Paris last week, CNN’s Richard Quest summed up Davos 2018 in three words: “optimism on steroids.”

Mr. Macron isn’t the first French leader to claim the mantel for attracting foreign investment. Former President François Hollande created an “Attractiveness Council” to foster foreign investment. The Council met once a year, with one day of “speed dating” between Ministers and top-level global CEOs, including a lunch with the President. But if these CEOs felt honored with such high-level access and attention, very few external communications were announced and the gatherings were kept private.

President Macron has instead taken the idea and put it “on steroids.” The Attractiveness Council is a public showcase, hosted in no less than the Versailles Palace and leveraged as a fixed turning point in the agenda en route to Davos. No longer private, the Choose France summit is the talk of practically every company in France, foreign as well as domestic.

Still, it cannot be denied that #ChooseFrance is not only an economic program, but also a political calculation by Mr. Macron. In the midst of Brexit negotiations and in advance of the 2019 European elections (a crucial test for his political party), Macron is bent on using all levers at his disposal to put France on the first page in the news cycle.

Moreover, with his now famous use of the phrases, “at the same time” and “we have the right to agree to disagree”, Mr. Macron is undoubtedly maneuvering in his own unique way to promote France’s global influence. Take these examples from his dealings with the UK: in one week alone, he loaned them back the Bayeux Tapestry, refused their “cherry picking” on the terms of an EU exit, renegotiated the Calais border agreement, and paved the way for a post-Brexit bilateral relationship between the two countries.

So too with the United States. President Macron invited President Trump to join him at Bastille Day, which caused an uproar of protest from the French public. In return, Mr. Macron has been invited to Washington in April by President Trump for the first official state visit of his presidency. After President Trump announced his intention to withdraw from the Paris Agreement on climate change, President Macron responded with #MakeOurPlanetGreatAgain, a nod to Mr. Trump’s campaign slogan “Make America Great Again” and at the United Nations publicly expressed his willingness to convince President Trump to remain in the Paris Agreement.

According to CNN’s Richard Quest, “Macron has succeeded where all others have failed, managing to criticize U.S. policies without becoming the latest Twitter target. In Trump’s eyes, Emmanuel seems to do no wrong.” The point is well-taken: the new European leader holding the ear of the U.S. president is no longer the British prime minister.

From this perspective, is the #ChooseFrance initiative only about communication? To what extent is President Macron truly pro-business?

It is undeniable that pro-business reforms are underway to pave the ground for the increased ease and facilitation of foreign investment. Among those reforms, the budget bill voted on last summer provides for a flat tax on financial income at 30% and decreases the corporate tax from 33.33% to 25% in 2020. Labor law reform was launched in the summer of 2017, designed to give more flexibility to companies, but which has been highly criticized, domestically, for being enacted by the equivalent of “executive order” (versus the legislative process). The French Minister for Economy, Bruno Le Maire, has launched PACTE, an action plan for the growth and transformation of French businesses. The consultation process is ongoing and the bill is tabled at the French Parliament until Spring 2018.

So, will President Macron succeed in advancing his vision of a new global contract while at the same time introducing more liberalism and dynamism to the French economic system? Can he sustain his delicate balancing act dealing with world leaders?

No one knows for sure, but President Macron seems bent on delivering on his vision—and, just as important, his opponents have yet to find a way to check his drive.

Stay tuned for more insights on #ChooseFrance.