Daily Times

The French government has announced the first major privatisations under President Emmanuel Macron which will be used to finance a new innovation fund and pay down the country’s public debt.

Under a draft law unveiled late Tuesday, the government plans to lower its shareholdings in airport operator Aeroports de Paris, gaming monopoly Francaise des Jeux and energy group Engie by an undisclosed amount.

Economy Minister Bruno Le Maire said the state holdings were worth an estimated 15 billion euros ($17.6 billion) and most of the proceeds of the sales will go towards a state fund for promoting innovative technologies.

During his presidential campaign last year, Macron promised public investment of $10 billion in new disruptive technologies such as artificial intelligence and robotisation.

“We are moving from a management approach to an approach of investing in the future,” Le Maire told Les Echos newspaper in an interview published Wednesday.

Macron, a 40-year-old former investment banker, has allowed strategic assets once considered too sensitive to sell to fall into private — and foreign — hands.

The maker of France’s famed high-speed trains, Alstom, is merging with Germany’s Siemens company, with the latter set to emerge as the dominant shareholder.

Italian firm Fincantieri has also taken control over major shipyards in western France, albeit with strong state oversight.

“It is about re-thinking the role of the French state in the economy,” Le Maire added in his interview.

“The state’s influence can be exerted in other ways than shareholdings,” he added, citing “increased regulation” as an alternative.

Long-term trend

Over the last 20 years, major French firms such as France Telecom, bank Credit Lyonnais, airline Air France and motorway operators have been progressively sold off by successive governments.

The state still has investments in the defence, nuclear and other heavy industries that the government has vowed to hold on to, seeing them as key to the country’s security and sovereignty.

The French state currently holds 50.6 percent of Aeroports de Paris, which owns and operates the capital’s Charles de Gaulle, Orly and Le Bourget airports.

Le Maire said that France would strengthen gambling laws ahead of the sale of Francaise des Jeux, which is 72-percent state owned.

France sold a 4.1-percent stake in energy company Engie in January 2017, taking its shareholding to 28.7 percent, to help finance a state-led rescue of troubled nuclear firm Areva.

The French state is the biggest shareholder in Engie, which is the world’s top independent electricity producer and a leading liquefied natural gas importer.

The law authorising the privatisations is expected to come into force by early 2019.

France has not balanced a national budget since the early 1970s and it has a public debt that represents nearly 100 percent of its GDP, far above the EU target of 60 percent.

Published in Daily Times, June 14^th 2018.