Americanexpatinfrance's Blog

France’s strong tradition of research and innovation, as well as growing FDI and domestic investment in pharma, nanotechnology, cleantech, biotech, and other innovative sectors seem to be gaining worldwide recognition.

In the latest rankings of Innovation Cities released by the company 2thinknow, the United States has 23 cities in the Top 100, Germany has 16 and France has 9, making it third among countries in the poll. One of my favorite cities, Lyon, even makes it in the Global Top 10. Congrats to Lyon! The following French cities are in the Top 100:

#3 Paris
#8 Lyon
#27 Strasbourg
#37 Nantes
#39 Marseille
#41 Bordeaux
#44 Toulouse
#63 Montpellier
#96 Reims

After the Top 100 but within the overall ranking of 331 benchmark cities, France has several other cities featured within Europe: Nice, Lille, Cannes, Rennes. Although I’m personally surprised that Grenoble, a city known for its research and nanotechnology, is nowhere to be found…

The far right (Front National, FN) seems to be gaining ground in France, in the personality of Marine Le Pen, daughter of Jean-Marie Le Pen (the ultra-conservative former presidential candidate who made it to the second round of elections in 2002 against Jacques Chirac).

They recently received over 15% of the vote in the first round of France’s department local elections, les cantonales (compared to 17% for Sarkozy’s UMP Party, 25% for the PS Socialist Party, see graphic below). Although the abstention rate was very high (around 55%), it is an important alert for many French and politicians.

For France, there are worries about crime, immigration (specifically Muslim immigrants) and other issues that motivate people to vote for the hard-line party FN. But this is not a French phenonmenon, as the far right has a growing influence around Europe.

I wrote about these elections in Bonjour Paris and how the decline in Sarkozy’s popularity could undermine the strength of UMP’s election results. In fact, some members of UMP and even Sarkozy’s cabinet have called for voters to choose archrival PS (Socialists) in case the choice was between PS and FN.

Next step: the 2nd and final round of the elections will take place this Sunday March 27.

You can read more about this and the far right movement on France24 (English, excerpts below), Figaro (French, conservative), Libération (French, liberal), BBC News and The Economist. The Figaro most notably has department by department results of the election. They also have a special section on the elections.

Local elections see gains for left and far right

French President Nicolas Sarkozy’s conservatives lost ground in nationwide local elections on Sunday that saw a low voter turnout and significant gains by opposition left-wing parties and the far-right National Front.

AP – French leftists and the resurgent far right enjoyed strong showings in local elections Sunday that left President Nicolas Sarkozy’s governing conservatives struggling to maintain prominence.

Sarkozy’s role in launching the international military intervention in Libya on the eve of the voting did not immediately appear to have swayed the outcome of the voting in France’s cantons.

The elections for France’s smallest administrative segment are relatively minor, but they are the last test of parties’ nationwide strength before next year’s presidential elections.

Turnout was about 45 percent, low for France, the Interior Ministry said. The prime minister, anguished by the low participation, urged voters to turn out for the runoffs March 27.

The opposition Socialists enjoyed the most votes overall with about 25 percent of votes, according to preliminary results Sunday night from the Interior Ministry.

Sarkozy’s UMP party and allied parties had about 32 percent of votes, Interior Minister Claude Gueant said. But French television and rival parties said the UMP itself had less than 20 percent of the vote.

The far right National Front had about 15 percent of the vote, Gueant said. The party is riding the wave of popularity of its new leader, Marine Le Pen, who has tapped into worries about Muslim immigrants.

Le Pen took the party leadership in January from her father, party founder Jean-Marie Le Pen, an icon in French politics for decades who worried millions of French voters and neighboring countries when he made it into the runoff in 2002 presidential elections.

Recent opinion surveys have showed Sarkozy’s approval ratings at historic lows. Leftist voters are angry at his cost-cutting measures and say he is too cozy with corporate interests. Many conservatives are disappointed that he has not been bolder about loosening up the labor market and hasn’t eased tensions between police and youth in suburban housing projects.

A win in a cantonal election gives candidates a seat on councils overseeing France’s departments, or provinces.

As BBC News reports, the current nuclear risks (and potential meltdown disaster) in Japan has brought public fears about nuclear power to the forefront of debate in several European countries, including France and Germany. Some political parties, including the Europe Ecologie, want to hold a referendum (public vote) on nuclear power in France.

Conservative daily Figaro has a poll on this issue, to which, at the time of publication, over 73% of French said there should NOT be a referendum on the issue. As the BBC highlights below, logistically speaking, it is nearly impossible to imagine France getting rid of its reliance on nuclear power, as 75% of its energy comes from it (with 19 nuclear plants and 58 reactors making it the 2nd biggest network after the US). Figaro also has an article about the risks of nuclear power.

French liberal, gauche daily Libération has an in-depth feature on this question, with a map of France’s nuclear installations that I’ve pasted below.

The French government has indeed said it wants to “learn lessons” from this case to optimize the security of France’s nuclear installations, which government officials assure have little risk.

What do YOU think?

BBC excerpts:

“…France gets 75% of its energy from nuclear power, exporting the excess and earning useful currency by so doing. In addition, some in government want to sell French reactors to emerging economies. Greenpeace immediately called for a reversal of this nuclear policy which France embraced in the 1970s after the “oil shock” when the price of oil jumped. The group Sortir du Nucleaire protested by the Eiffel Tower, unfurling banners saying “Nuclear is killing the future”.

Daniel Cohn-Bendit, who is a member of the European Parliament for the Green Party, told French radio that there should be a national referendum on the country’s dependence on nuclear power. “It begs the question of the need for civil nuclear power,” he said. “Is it not time to sound the alarm?” This is difficult for the government because France’s dependence is so great.

I just received an email from the French Embassy in the US that several schools in the New York City area are looking for full-time and part-time French language teachers. I have put the contents of the email as well as the separate job announcements into one PDF available here.

France is unfortunately known for its high taxes. One of the recent fiscal measures, le bouclier fiscal or the tax cap (a.k.a. tax shield) limited all direct income taxes to 50% no matter the income bracket. I wrote about this recently on Bonjour Paris. Those who defended it said it lightened the load of taxes, but those opposed to it reckoned it protected the wealthy while not contributing to reducing the deficit and debt.

Recent debate lead up to today’s decision, announced today by Prime Minister François Fillon, to end the policy. (However, some sort of tax cap will remain in place, at an unspecified percentage, for the less well-off, which make up 52% of the beneficiaries). You can see the French article from Le Point at the link above, and the video from BFM TV below.

Below the video, excerpts from this Wall Street Journal article. Next on the agenda: reforming or abolishing the wealth tax (see more in WSJ and Bonjour Paris articles as well as a detailed report by Le Figaro), which could help as many as 300,000 households pay less tax.

What are your thoughts on these developments?

EUROPE BUSINESS NEWSMARCH 3, 2011, 7:38 A.M. ET
French Prime Minister Says Tax Shield to be Abolished

By WILLIAM HOROBIN

PARIS—French Prime Minister François Fillon Thursday confirmed the government intends to abolish a tax shield that has become a controversial hallmark of Nicolas Sarkozy’s presidency.

Mr. Sarkozy decreased the threshold of the tax shield shortly after coming to power in 2007 so that no taxpayer pays more than half their income in taxes. But his ratings have hit record lows and the tax shield has become a thorn in his side as many voters see it as a measure benefiting the wealthy few.

“We have to face up to reality: the tax shield has been misunderstood, and the crisis has probably made our citizens more sensitive to some of its effects,” Mr. Fillon told a conference, organized to discuss the reform of property and capital taxes that Mr. Sarkozy has promised for the first half of 2011.

The tax shield was designed in part to limit the impact of France’s wealth tax, which Mr. Sarkozy also intends to reform before the presidential elections in May 2012.

The government says it will either do away with the wealth tax completely or significantly modify it. Mr. Fillon said Thursday said the reform will free 300,000 households from the wealth tax.

Yet the government is insisting the reform must have a neutral impact on public finances at a time when France is fighting to rein in deficits. If the wealth tax and the tax shield are abolished, the government will need around €3.2 billion ($4.44 billion) to make up the shortfall.

“We won’t finance this reform with debt. Balancing the budget will be strictly respected,” Mr. Fillon said.

He also ruled out a variety of options that have been suggested in recent months. The government will not tax gains on the sale of main residences, will not reverse its reduction of inheritance tax, and will not introduce an additional tax bracket, Mr. Fillon said.

Mr. Fillon also said the reform of capital and property tax is one of the reforms necessary for greater tax convergence in the euro zone.

European leaders are negotiating a competitiveness pact for members of the euro zone. Some countries have balked at Franco-German proposals that they fear would compromise their sovereignty in sensitive areas like pensions and salaries.

Mr. Fillon said France and Germany should aim to harmonize corporate taxes, starting with the base of these taxes before looking at the rates.

The Economist has a feature this week about the growing French expatriate population in the Greater London area: 400,000 and counting, according to some estimates, with cultural, economic and social implications that go along with such a presence. In fact, the French Parliament will soon have a new constituency to represent French citizens in Britain and Northern Europe.

It turns out that in interviews with expats, some of the reasons for the flock include: high-paying job opportunities, lower income and corporate taxes, a chance to raise one’s children bilingual and, perhaps most importantly, a different “international feel” about London that many French do not find in London. Excerpts below.

What do you think of this article? Do you think France is less business-friendly than the UK, and what do you think should be done to encourage entrepreneurship, innovation, lower taxes and more business-friendly policies conducive to private enterprise and investment? Is President Sarkozy on the right track?

The French community in London
Paris-on-Thames
The French influx to London suggests what governments can and can’t do to boost their cities’ allure

“…French Londoners are often in their prime. The archetype is a banker with children at the Lycée Français in South Kensington, the established hub of the community (“the 17th arrondissement”), who misses the food and weather of home. The City, a bigger financial centre than Paris, is keen on French workers, especially traders—products of an educational system that turns out mathematics whizzes in droves. It is rational interests, rather than cultural affinity, that draw this type of Frenchman to London: high-paid work, lower taxes (especially on wealth), and the chance to raise bilingual children…

…The superior beauty and efficiency of Paris often come at the price of dynamism. Many young French arrivals in London say they are fleeing rigid social codes, hierarchical corporate culture and a sense of distance from the global swirl of people and ideas. “It is hard to go back once you have tasted the internationalism here,” says Jessica Moyal, who works in private equity.

French twenty-somethings see London as a “gateway to globalisation”, agrees Édouard Braine, the French consul-general, who compares the ritual sojourns in the city taken by his younger compatriots to the globe-trotting gap years favoured by their British peers. Not all secure high-flying jobs: many come to study, or to work as au pairs or waiters while perfecting their English, or to find a niche in London’s huge creative industries. Many young French of African or Arab origin also say that there is less discrimination in Britain….

….Far more likely to pull talented French people back home than Britain’s economic doldrums is the prospect of France becoming more business-friendly. Nicolas Sarkozy is chipping away at taxes and regulations, and wants Paris to expand through private-sector development. That sort of thing is within the gift of politicians. But replicating the loose, globalised way of life in London—the anything-goes culture that draws a certain kind of young French person—will be much harder.”

I wrote in this week’s Bonjour Paris about these topics and more. You can read the article here. You can see my profile and other articles on this page.

You can read more about the G20 meeting of Finance Ministers in Paris in Le Point (in French). The Financial Times also covers the story (if you can’t read story on 1st try because of subscription matters, you can google the article title and usually find an accessible version).

The CGPME (Confédération Générale des Petites et Moyennes Entreprises) is a business interest group in France representing entrepreneurs and directors of start-ups and SME (small and medium enterprises). They have proposed 60 ideas to simplify business operations for SME’s in France. They cover administrative, hiring, accounting, financing, etc. You can download the PDF (in French) on their site, under the PDF logo “en savoir plus”. The opening remarks below state that for the French economy, simplifying administrative procedures for SME’s is an important factor and that by rendering regulatory and business law texts more easily accessible and user-friendly, this would help French SME’s to become more productive and competitive not only at home but also abroad.

Jeudi 17 février 2011
Simplifications administratives
60 propositions de la CGPME
Propos liminaires

Les dispositifs de simplification administrative représentent des enjeux majeurs pour notre économie.

En permettant une meilleure lisibilité et compréhension des réglementations, en améliorant la transparence de l’administration, ils simplifient le contexte dans lequel les entreprises exercent leur activité : une réglementation administrative mal conçue et obsolète peut décourager la création d’entreprise, entraver l’innovation et dresser des obstacles rendant les entreprises moins compétitives au plan international.

According to Stratégies magazine (which specializes in media, communication and marketing), the French TV channel W9 broadcast of the US Superbowl attracted a record 300,000 people. Considering the game was on live at local time midnight through 3am (Sunday into Monday) that American football is not a popular sport in France (and given the smaller population base in France), this is quite remarkable and a was over a 30% increase from last year’s game. Original article below in French.

Le Super Bowl attire 300 000 téléspectateurs sur W9
La finale du championnat de football américain, le Super Bowl, a été suivie par 300 000 personnes sur W9, dans la nuit de dimanche 6 à lundi 7 février, entre minuit et 3 heures du matin, soit 100 000 personnes de plus que l’an passé. La chaîne a réalisé une part d’audience de 8,6% sur les individus de 4 ans et plus et de 17,4% sur les hommes de moins de 50 ans. Des scores comparables à ceux que réalisait France 2 précédemment.

Allez allez ! Turning out to be an eventful Six Nations rugby tournament. France defeated Scotland despite being the smaller team. The Wall Street Journal covers this story here. Excerpts below.

SPORTS FEBRUARY 7, 2011
French Scrum Too Fast for Scots
Europe’s Six Nations rugby series opens with a sharp lesson that big is not always best
For all the talk it inspires about gameplans and guile, international rugby union is still basically a game of brute force.

No matter how complex the offensive schemes or strategies in today’s game, it’s no secret that the final outcome usually hinges on the fearsome tangle for possession between 16 hulking giants known as the scrum.

“It’s like playing cards—the scrum is the ace in the game,” said Didier Retière, the France assistant coach.

This fundamental principle helps to explain the unusual approach adopted by Scotland head coach Andy Robinson for Saturday’s opening round of the Six Nations, the annual joust between Europe’s leading rugby countries.

Seeking to end a 12-year losing streak against France in Paris, Mr. Robinson assembled the biggest, toughest, strongest players he could find and sent them on to the field with one specific goal: To hammer the opposition scrum.

On paper, the resulting confrontation was a mismatch. Scotland started the game with the biggest eight-man pack in the history of this sport: Four Scottish players weighed 115 kilos or more and the entire group tipped the scales at 900 kilos. It wasn’t just their weight that stood out either—Nathan Hines, at 6ft 7in, was merely the third tallest member of the pack.

It meant that when the two teams lined up before the kick-off at the Stade de France, the Scottish forwards dwarfed their opponents: On average, the France pack was more than six kilos lighter and three inches shorter. But what happened next was nothing short of extradorinary. The undersized French forwards didn’t just hold up against the Scottish, they dominated them, paving the way for a 34-21 victory that wasn’t as close as the scoreline suggests. The official match statistics show that Scotland lost just one set scrum, but in reality France laid waste to the Scottish pack, repeatedly forcing the Scots to collapse the scrum and incur a penalty….