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How the “yellow vests” weigh on the image of France

The sometimes spectacular images of the “yellow vests” that have traveled the world are worrying the business community. Several voices are worried about the effect of violence on the attractiveness of the country.

After a return to favor last year in the hearts of investors, France will she once again see its attractiveness be sealed? Several voices warn of the harmful effects of social movements on the image of the country among foreigners. The scenes of violence, particularly in Paris, and the impression of disorder are fearing a deterioration of the business climate.

The movement of “yellow vests” has “a cost for growth and attractiveness of France,” said Bruno Le Maire Sunday, quickly joined by employers: Tuesday, the president of Medef International, Frédéric Sanchez, estimated that the attractiveness of the country has “collapsed” in recent weeks. According to him, the images relayed by the foreign media of yellow vests attacking businesses give “the impression that France is in civil war”. The representative of the employers’ organization even considers that these events will have an impact more important than the riots of 2005, equally spectacular but less “visible” because taking place in less identifiable places: “there is not a businessman who at one point in his life did not come to the Champs-Elysees, “he adds, lamenting images of urban violence on the most beautiful avenue in the world.

Investor’s worries

The Medef is not the only one to sound the alarm: in a report published mid-December Amundi Asset Management writes that protests may limit Emmanuel Macron’s leeway to reform the country. Co-author of the note, the economist Tristan Perrier believes that the effect of events on economic activity is “reversible”, provided that they stop quickly. If, in the short term, the businesses will be able to make up for the shortfall in 2019, in the long term the investors will be attentive to the “political horizon”. “France, which had attracted keen interest since the election of 2017, was then an island of calm brought by structural reforms,” ​​said the economist, in an international context marked by Brexit, uncertainty and protectionist folds . Now, “the momentum is much less favorable to the government, which will probably have to reduce its ambitions “. Foreign decision-makers will therefore scrutinize the next few weeks carefully before reviewing their plans: “well brought, the transformations caused by the big debate ahead could bring welcome changes and reassure investors “, including calming the movement of” yellow vests, “said Tristan Perrier. For now, Amundi has revised its growth forecast for 2019 down to 1.4%, partly because of the social movement, but also because of negative developments elsewhere in the world. The Amundi economist considers that the most necessary sectoral reforms concern the housing sector , “people’s first concern”. Changes in this sector could create sustainable purchasing power but may face “resistance”.


According to Amundi, France “adds its voice to the political noise that weighs on investor confidence in European assets”. After more than a year and a half to chain the reforms without interruption, and without any trade union or popular mobilization being able to interrupt this frantic pace, the government, which defended a clear line and built the image of a new France Voluntary, reformist and dynamic, is now scrutinized closely by the business community, who are waiting to see if it will slow down its plans and if the country will revive its tradition of protest. Emmanuel Macron however wanted to reassure on this point during the first Council of Ministers of 2019 by reaffirming his will to continue to reform France.

Stop for the recovery of tourism

Investors are not the only ones to express their concern. Tourism stakeholders deplore a difficult end of the season, while their activity resumed after several years marked by attacks and social conflicts. Didier Chenet, member of the National Group of Independents of Hotels and Restaurants (GNI Synhorcat) announced December 13 on FigaroLive losses estimated between “50 and 100 million euros in the hotel sector”. “We were recovering our competitiveness”, but the crisis ended an “exceptional year”. And the troubles are not over yet: “We have everything to fear for January and February,” prophesies Didier Chenet, who is worried about a negative medium-term trend. This Friday, the general director of Atout France, the agency promoting French tourism abroad, announced that international air arrivals in Paris were down in December between 5% and 10%. According to the institution, the impact on tourism will only widen in case of continued violence related to the events. The government is therefore considering “complementary actions to reassure” potential visitors, said Jean-Baptiste Lemoyne, Secretary of State for Tourism at the Quai d’Orsay.


Same story on the side of urban France, an association that groups 2000 cities and deals in particular with their economic development. Its president, the mayor of Toulouse Jean-Luc Moudenc, denounces the “images of war that have gone around the world. They are shocking, spectacular and give a distorted image of our country. The local elected official is worried about the negative and lasting effect of these scenes “which arouse stupor, apprehension” with foreign actors. The feedback from professionals is worrying, he says: “tourism and hotel operators feel the weight of cancellations”, and the representative fears that “the efforts of all actors, public and private, who promote our countries are ruined by these images. ”

Brexit far more penalizing than “yellow vests”

For now, however, the situation is not irreversible. The head of the barometer on the attractiveness of Franceat EY, Marc Lhermitte, believes that the situation is “problematic but not dramatic”: the Hexagon has solid foundations and assets, especially compared to its European neighbors plunged into turpitudes internal politics. In the short term, foreign players are astonished, but those already present in France know the roots of the social movement, while those who think about setting up in the country remain, on the whole, confident. “The Brexit is still more worrying for our customers,” says Marc Lhermitte: “in the medium term, the question remains whether the government can continue the transformation of the French economic and social model with reforms such as lowering the tax on companies, pensions, public spending, the cost of labor. This is how we can strengthen our competitiveness. ” No panic, but increased vigilance, therefore.

The next summit of the attractiveness of France, January 21, will take the pulse of the business community, after more than ten weeks of events. Soon, however, business attention will turn to the next obstacle on the road: the European elections , whose outcome is uncertain, and which concentrate their concerns.

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