France top European destination for new foreign investment: EY

[PARIS] France has overtaken Britain and Germany as the top destination for international investments in Europe for the first time, a survey showed on Thursday, although the number of projects risks being revised in the wake of the coronavirus outbreak.

France counted 1,197 foreign investment projects last year, up 17 per cent from 2018 and ahead of Britain with 1,109 projects (up 5 per cent) and Germany with 971 (unchanged), according to consultants EY.

Two thirds of business leaders surveyed by EY at the end of April expected to revise their French investment plans this year and 15 per cent expected to push them back to 2021. None expected to cancel projects or increase them.

President Emmanuel Macron has eased labour laws on hiring and firing, transformed a payroll tax credit scheme into a permanent business tax cut and set a flat 30 per cent tax for investors as part of a drive to make the French economy more attractive internationally.

A series of violent anti-government protests against his reforms in 2018 and 2019 and then weeks of transport strikes against a pension overhaul at the end of last year and early this year had little effect on foreign investors' enthusiasm.

Since the coronavirus outbreak, Mr Macron's government has refocused on containing the economic fallout and aims to boost the recovery by pushing French companies to relocate production activities in France.

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REUTERS