France to tighten review of foreign investments

• Finance Minister said that the taking of a stake of 10 percent in large French companies by a non-European investor would now trigger a review by the government.

PARIS: France said Wednesday it will tighten its review of foreign investments in order to protect domestic firms which have been weakened by the coronavirus pandemic.

Finance Minister Bruno Le Maire said in a television interview that the taking of a stake of 10 percent in large French companies by a non-European investor would now trigger a review by the government.

France just dropped in January the threshold for a government review to a 25 percent ownership stake in certain industries considered strategic, with it having previously been set at 33 percent.

Those strategic industries currently include defence, energy, aerospace and transport, but Le Maire said biotechnology would also be added.

"During this period of crisis certain companies are vulnerable... and could be bought at a low price by foreign competitors, I won't let that happen," Le Maire said on LCI television.

France is following Germany which earlier this month announced it would reinforce its review of foreign investments that had already been tightened last year.

Meanwhile, Labour Minister Muriel Penicaud announced on France Inter radio that the number of people on a special work furlough programme had risen to 11.3 million, or more than one in two workers in the private sector.

Under the system companies pay workers they are forced to temporarily lay off or reduce working hours for due to the coronavirus and the state reimburses the firm, thus avoiding the traditional unemployment benefits system.

Penicaud indicated the amount the state pays firms, currently up to 84 percent of the net wage of employees, could be reduced from June 1 as the government seeks to encourage a return to work as lockdown restrictions are eased.

The French government unveiled on Tuesday its plans to relax restrictions when the current lockdown expires on May 11.

While restaurants and cafes will remain shut, many other businesses will be able to open to the public as long as social distancing measures can be respected.

"We need to resume work and a maximum of French workers need to return to work," Le Maire said on LCI television.

"Getting back to business is indispensible for the French nation," he added.

The government has already warned of an eight percent contraction for GDP this year.

The national statistics agency INSEE estimated last week that activity in the private sector, which makes up around three-fourths of total GDP, had plunged by 41 percent overall.

Some industries, like construction, restaurants and tourism, have effectively been at a standstill since the business closures and stay-at-home orders were announced in mid-March.