Macron Unveils Moonshot $35 Billion Industrial Revival Plan
Emmanuel Macron unveils a $35 billion plan to reverse years of industrial decline in the French economy.
(Bloomberg) --
French President Emmanuel Macron unveiled a 30-billion-euro ($35 billion) plan to create the high-tech champions of the future and reverse years of industrial decline in the euro area’s second-largest economy.
The plan, dubbed “France 2030,” foresees investing the funds over five years in sectors including nuclear and renewable energy sources, electric cars, semiconductors and robotics.
“I want us to look ahead and see our weaknesses and strengths,” Macron said in a speech at the Elysee Palace on Tuesday. “We need the country to produce more.”
France 2030 is the latest in the country’s long history of pumping public money into a hoped-for industrial renaissance. After the global financial crisis, then President Nicolas Sarkozy launched a 35-billion future investment program, which has been replenished three times. Macron said this plan is different because it will take greater risks and not rely on well-established industrial firms.
Despite the various efforts by successive governments, the share of industry in the French economy has declined almost without interruption and France hasn’t recorded a goods trade surplus since 2002. Six months before the presidential election, Macron is under pressure to show he can reverse those fortunes, particularly in former industrial heartlands, where he struggled to win votes in 2017.
Macron said he wants to create “a virtuous cycle -- innovate, produce, export -- to finance our social model.”
“We are a creative country, it’s in our DNA,” Macron said. “But alongside that we have real weaknesses. We have under-invested in education, training and higher education” and “we have a quality of labor to allocate that isn’t at the right level.”
He said the three key objectives of France 2030 are:
- building small reactors in France
- becoming the leader of green hydrogen, and
- “decarbonizing” French industry.
The initiative comes only a year after the 100 billion euro “France Relaunch” program, which also aimed to go beyond crisis spending to address the country’s longer-term problems of low investment and hiring. By the government’s own expectations, there will still be around a third of that program unspent at the end of this year.
The investment plans are in keeping with French industrial policy, but increasingly put Macron out on a limb in Europe, where other countries have begun talking about the need to return to some form of fiscal discipline after crisis-spending inflated deficits during Covid-19. Macron’s move is all the more surprising given that when his government first mooted the France 2030, it said European partnerships would be a necessary condition for success.
| The plan includes: |
|---|
| * 8 billion euros for nuclear, hydrogen and renewable energy, including to build a new small nuclear reactor |
| * 4 billion euros for transport and mobility, with a target to produce 2 million electric and hybrid vehicles and the first low-emission aircraft |
| * 1.5 billion euros for food and agriculture |
| * 1.5 billion euros for moonshot projects such as virtual reality, cultural production, seabed exploration |
| * 6 billion euros for robotics |
| * 2 billion in trainings for booming sectors |
| * 5 billion euros to support industrial startups |
Half of the money will go to small companies, with a pledge to be green. If projects fail, the funds will quickly be reallocated, Macron said.
We “need lots of public and private money,” he said, “because as the Anglo-Saxons say, the winner takes all.”
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