France

French cracks show up Italy’s messy fiscal house

19 Jun 2024

Investors fear Paris’s financial laxity. Yet, after wasting $235 bln on tax credits for home improvements, Rome’s finances are also shaky. EU funds will help offset the phasing out of incentives. But with weak growth and nervy markets, cutting debt is both harder and more needed.

France would feel lonely if debt crisis hit

18 Jun 2024

Market fears of a far-right victory in the elections sent yields on the country’s 2.3 trln euro debt to 12-year highs. If traders’ worries deepen, support from the European Central Bank is not a given. And a eurosceptic government would be deprived of Brussels’ goodwill.

The Group of Seven is bruised but much needed

17 Jun 2024

The club of large, rich nations has struggled with wars in Gaza and Ukraine. Most of its leaders are lame ducks. If Donald Trump becomes US president and Marine Le Pen leads France, they could paralyse it. Co-ordinating advanced democracies is more necessary and harder than ever.

Euro zone banks’ periphery premium is here to stay

13 Jun 2024

Lenders in Ireland, Italy, Greece and Spain on average trade with a 30% higher price-to-tangible-book value than French, German and Dutch ones. It reflects a reversal of fortunes between the old periphery and core – but also different business models, meaning the gap may persist.

Europe’s election eruption threatens paralysis

13 Jun 2024

Centrist and green parties saw big losses in a vote to elect the European Union’s parliament, sparking a shock snap election in France. In this Viewsroom podcast, Breakingviews columnists explain how ensuing instability could slow the continent’s response to urgent global issues.

French investors face full year of financial funk

13 Jun 2024

If Marine Le Pen’s far-right RN party wins next month’s election and sticks to its pledges, France’s 5% budget deficit will balloon. President Emmanuel Macron could call a new election, but not for 12 months. Amid paralysis or worse, the state’s fiscal position may get messier.

EU tariffs solidify China’s EV hierarchy

13 Jun 2024

Investors brushed off less-than-feared levies on Chinese electric cars, with BYD stock up 3% from two days ago and SAIC down just 2%. For the former, a vertically integrated model and lesser reliance on subsidies mean it can now pull ahead of compatriots at home and abroad.

Macron lobs petrol on fiery French economic waters

10 Jun 2024

After suffering a beating in European elections, France’s president has called a snap parliamentary poll. Debt investors are already antsy about the country’s yawning deficit. A new electoral battle with Marine Le Pen’s far-right National Rally party will hardly help matters.

Tories’ obsession with French unions is obsolete

31 May 2024

UK PM Rishi Sunak accused Labour of plotting ‘French-style union laws’. But France has the lowest proportion of organised workers among big European nations. And there were fewer strikes in the last three years than in Britain. Time for the Conservatives to find another bogeyman.

AI will power up buyout barons’ green-energy spree

30 May 2024

Brookfield offered $6.6 bln for French solar and wind firm Neoen after EQT and KKR struck renewables deals worth $4.6 bln. Buyout barons have cash to meet the investment requirements of energy-hungry artificial intelligence, and future rate cuts mean valuations may have bottomed.

Niel can be less stingy to fulfil his salsa dream

30 May 2024

The French Iliad owner may buy out Millicom, a $4 bln Latin American telco in which he owns a 29% stake. His potential $24-a-share bid implies a tiny 2% premium. Even with the stock up nearly 40% this year, he can offer more for a growing, profitable company.

Macron’s Draghi sales pitch is a long shot

24 May 2024

The French leader wants to install former ECB head and Italian PM Mario Draghi in a top EU job. The two men agree on economic policy and how to reform Europe. But anointing a political heavyweight may alarm other member states, and parties’ bickering could scupper Macron’s bid.

New Caledonia to Macron: it’s the economy, stupid

20 May 2024

Deadly riots prompted the French president to impose a state of emergency in the Pacific Ocean territory, which holds 5% of world nickel reserves and gives Paris a strategic outpost in the region. To revive the island, a new economic deal would work better than an army crackdown.

China tests EU resolve on export trade fight

14 May 2024

France’s Emmanuel Macron got little to show from President Xi Jinping’s European tour this month. In this Exchange podcast, MERICS expert Grzegorz Stec explains the difficulty of managing ties with Beijing and why balancing risk and business opportunity is so tricky.

Alstom cash call is just first stop on rescue ride

8 May 2024

The indebted French train maker announced a 1 bln euro capital hike, which was smaller than it could have been thanks to funky hybrid debt. The next job for boss Henri Poupart-Lafarge is to generate cash. A fast-growing industry backdrop gives investors a reason to hop aboard.

Total’s US re-listing idea could backfire

8 May 2024

The $170 bln oil major is considering decamping to the United States to court oil-friendly investors. Yet getting included in the big stock index would mean cutting French roots, and a valuation boost looks unlikely. Staying at home may also be better for its growing power unit.

EU’s China car tariffs face a very high bar

6 May 2024

Brussels would need levies as high as 50% on Chinese imports to slow sales by BYD and rivals, double recent precedents. It'd prompt a sharp response. President Xi Jinping can use his visit this week to remind Europe’s carmakers how much they stand to lose in such a scenario.

France’s Atos entrée heads for fuzzy denouement

2 May 2024

The French state wants to buy the defence assets of the IT group, which is trying to restructure 4.9 bln euros of debt. It should then be easier to sell what’s left of Atos. But it’s unclear how or when Paris might marshal private buyers to recoup its outlay of up to 1 bln euros.

Satellite union will struggle to defy gravity

30 Apr 2024

Luxembourg-based SES agreed a $3 bln cash acquisition of US rival Intelsat. The news wiped a fifth off the buyer’s shares. Investors thought they were getting a ton of cash from the lowly valued satellite operator, but instead they’re getting a deal with questionable returns.

Global retailers are headed for Shein reckoning

30 Apr 2024

Zara owner Inditex, H&M and other apparel giants are holding ground against the Asian fast-fashion upstart. However, AlixPartners’ retail expert Matt Clark argues in this Exchange podcast that Shein’s focus on garment quality could threaten the dominance of pricier rivals.