FE Editorial : Say oui, to industry

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SummaryA nation which has just been stripped of its AAA-status, you’d think, would be keen to project a pro-business image.

A nation which has just been stripped of its AAA-status, you’d think, would be keen to project a pro-business image. Which is why President Hollande hired French advertising giant Publicis to create a “Say Oui to France” global campaign, to highlight the fact that France is home to 20,000 foreign companies, to drown out the country’s harsh realities—that the economy, which grew just 0.1% over the past four quarters, is on a steady spiral downwards with debt already at 90% of GDP, that Hollande’s slapping a 75% tax rate on high-income earners and doubling of the capital gains tax has got the richest man in France applying for Belgian citizenship, that the increase in the retirement age has been partially rolled back …

Sadly, Hollande’s anti-business credentials may have taken a new turn with the row over ArcelorMittal’s Florange blast furnaces. Hollande, it is true, hasn’t been anywhere as crude as Arcelor’s then chief who described Mittal’s shares as “monkey money”, nor has he endorsed his industry minister Arnaud Montebourg’s line of vowing to expunge Mittal from France for daring to lay off 629 workers at the Florange furnaces. While Hollande has given Mittal various options and his office has said the discussions will continue, FT reports France is firm the furnaces have to be redeveloped or the entire Florange operations will be taken over by the state till a new buyer is found. Mittal wants to close two mothballed blast furnaces at Florange while continuing to operate that part of the facility that produces steel for the automobile industry.

While the French government may feel within its rights to hold Mittal accountable for promises he is supposed to have made while taking over Arcelor, surely it has to take into account the dramatic change in circumstances after the global financial crisis. With the demand for steel falling 26% since the crisis and a debt-laden ArcelorMittal downgraded to junk, what’s at stake is not the 629 workers Hollande is concerned about, but all the 20,000 workers employed by Mittal in France—indeed, if letting go of a smaller number can help save the jobs of others, that’s something worth working towards. Such creative destruction is what’s at the heart of capitalism. Even Publicis, with all the skills it has, will find it difficult to rid Hollande, and France, of the anti-business and irresponsible socialist tag it has acquired over the years—France hasn’t balanced

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