French President François Hollande hopes to create 470,000 jobs by injecting €3.5 billion in 34 key industrial sectors, but he will need Europe’s help. euractiv.fr reports.
President François Hollande and his firebrand Industry Minister Arnaud Montebourg presented a new investment strategy for 34 industrial sectors on Thursday (12 September).
The French President was following on the footsteps of Charles De Gaulle, who instigated French industrial policy in mid-late 20th century.
With France preparing to cut €18 million from its 2014 budget, a €3.5 billion boost to industry may seem surprising. But it is part of a long-term project that the president deems an essential “offensive strategy”, benefiting both unemployment and France’s image.
“Industrial decline has destroyed 750,000 jobs in the past 10 years. With this plan, we want to recreate 450,000 new ones”, said Montebourg.
Hollande defended the new policy, saying that there was nothing “shocking” about it, and that “Germany, UK and all major emerging powers are all developing industrial strategies.”
A protectionist strategy
The recovery plan appears oriented towards France first, with investment priorities oriented towards French industry's specific strengths. Small fuel efficient French cars will benefit from the policy's “environmental transition” banner which references fuel consumption standards of less than 2 litres per 100 km.
Other strategic priorities mentioned by the President – new technology and the 'economy of the living' – also bring together important national industries, such as the food, biotechnology and digital sectors.
Hollande underlined that it was important to “ensure our digital sovereignty” at a time when three-quarters of computers are manufactured in North-America. The president also highlighted that France was lagging behind Germany in the field of industrial robots – 35,000 in France vs. 150,000 for Germany.
“Quality is not only German, technology is not only Japanese, innovation is not only American and competitiveness is not only Chinese. The third industrial revolution will also happen in France,” the President announced.
Europe at the rescue
However, Hollande asked for European support. He said that the European guidelines on state aid needed to be rethought, and a competitiveness policy needed to be promoted that would make cooperation between companies easier and allow for the emergence of European champions.
The president also called for a “true trade policy”. France has voiced reservations about ongoing trade negotiations with the US, maintaining defensive positions in areas such as culture and food.
"This initiative should be warmly welcomes," said Pierre Gattaz, the President of the employers' organisation MEDEF.
"However, this ambition will remain unheeded if fiscal, social and regulatory conditions in our country are not improved in the coming weeks. We must ugently lower the labour cost and simplify the rules, liberate our companies," he said in a statement.
After a very active investment policy until the end of the 80's in industrial policy, France has lost ground in this field leading to a loss of 750,000 jobs in the last ten years.
Hollande's plan amounts to €3.5 billion, in 34 different industrial sectors.