PARIS – France’s culture and cuisine have long made it the most popular tourist
destination on the planet, but French authorities face a more difficult task
when it comes to attracting non-European companies and investors.
with stagnant growth and near-record unemployment of 10.6 percent, the
government of the world’s fifth-largest economy is introducing new measures that
it hopes will improve its reputation and entice foreign firms – including
Israeli ones – to establish operations there.
Around 100 Israeli
companies operate in France, employing more than 2,400 locals, according to
Serge Boscher, managing director of the Invest in France Agency, which is
responsible for “job-creating investment.” These companies cover agriculture,
plastics, transport, logistics and other industries, and are seen as just the
tip of the potential iceberg.
“The challenge for us is to attract Israeli
start-ups,” Boscher says, referring to hi-tech pioneers in biotech and
clean-tech. “Israeli companies are very innovative, and we need this high level
Moody’s recent announcement that it was stripping France
of its AAA credit rating seemed to underpin international sentiment over the
country’s economic performance.
The agency said a number of factors
influenced the decision, including France’s sustained loss of competitiveness
and the rigidness of its labor, goods and service markets.
confident that the international market will ignore Moody’s decision. However,
he points out that it provides an incentive for France to push ahead with
reforms, including the “competitiveness pact” announced earlier this
The Socialist government of President Francois Hollande promised
20 billion euros in tax credits to companies over a three-year period, beginning
Its announcement came one day after a government-commissioned
report by Louis Gallois, former chief of Airbus parent company EADS, recommended
that tax breaks be implemented over one or two years for immediate effect.
Gallois warned that high labor costs were reducing the profit margins of
businesses, leaving them little to invest in product innovation.
second key element to improving France’s combativeness, according to Boscher, is
a successful conclusion to the “Social Conference” – negotiations between unions
and business leaders that the government hopes will usher in a new era of
France, long famed for labor strikes that paralyze entire
industries, is looking to neighboring Germany’s “social dialogue” for
inspiration.An anemic auto industry
France’s all-important auto industry
has been hard hit by Europe’s economic crisis, as shown by Peugeot Citroen’s
decision earlier this year to layoff 10% of its domestic workforce of 80,000
Officials at Renault, France’s other famous car-maker, say
their company has managed to soften the blow from falling European demand
through its 13-year old cross-continental alliance with Nissan (joined recently
by a third partner, Germany’s Daimler Group).
Renault holds a 43.4% stake
in Nissan, while its Japanese counterpart holds a 15% stake in Renault, ensuring
that both partners have a mutual self-interest – and more importantly, enabling
them to manufacture almost one-tenth of their vehicles in their partner’s
“For the European auto sector, the biggest problem is
overcapacity,” Renault Nissan Alliance communications director Rachel Konrad
“Depending who you talk to, there is 20-30% more production
than purchases. The way the laws are set, you have to continue paying workers,
so it’s incredibly inefficient if they’re not producing anything. The fact that
our Normandy plant cannot only produce Renault’s engines, but also Nissan’s and
Daimler’s, is beneficial and increases job security. No other company can do
The alliance also helps boost sales, according to Jacques
Verdonck, Alliance Director in charge of coordination with Daimler.
we have achieved is to be less dependent on the European market,” Verdonck says,
pointing out that more than 50% of Renault vehicles are sold outside the
continent – including Russia, where the alliance has 32.9% market share, and
Brazil, where is has 7.7% market share.
On the production side, Renault
has been a pioneer in Zero Emission vehicles. Its Fluence ZE electric cars hit
Israeli and Danish roads this year, thanks to a partnership with Israel’s Better
Place – which operates dozens of battery-replacement stations for the vehicles in
Renault officials declined to comment on the performance
of their partner – which removed founder Shai Agassi as CEO in October and has
lost around $500 million since its establishment in 2007. However, they point
out that electric vehicles are an earlystage technology, which means they are
reliant on customer feedback and on differences in regulations between
“We have gotten more than 50,000 electric vehicles on the road
[in total]. I don’t think anybody, internally, thought it would be easy,” Konrad
“I have been working in electric vehicles since 2008, and if you
read the media four years ago, they said, ‘everybody will switch to electric
vehicles.’ Internally, people were saying, “no, this is a gradual shift, a
significant, important segment for our industry and for our planet, but it’s not
going to be immediate.’” ITER: Fostering fusion
France is literally miles ahead
of its neighbors in at least one form of transportation: long-distance
The TGV high-speed rail service completes the 750-kilometer
journey between Paris and Marseille in just over three hours. It departs the
capital’s Gare du Nord station, moves southeast through the green pastures of
Burgundy and the foothills of the Alps, arriving at Marseille’s Saint Charles
From there it is a short metro ride to the city’s ancient
The port area is changing dramatically thanks to
Euroméditerranée, Europe’s biggest urban renewal project. Backed by funding from
the European Union and ANIMA Investment Network – a group of government
development agencies in the Mediterranean basin – some 500,000 sqm. is already
built or under construction, with expectations this will double by
Marseille will be thrust into the spotlight when the city assumes
the revolving title of European Capital of Culture in 2013. But it is 60km.
away, in Cadarache, that the region’s most ambitious project is being conducted
– at the International Thermonuclear Experimental Reactor (ITER).
and run by seven members – the EU, US, China, Japan, South Korea, India and
Russia – ITER is the largest experiment ever conducted to demonstrate the
scientific and technological feasibility of fusion energy. Construction on the
Tokamak reactor began in August 2010, with completion expected this
Once operational, the reactor will produce electricity via
several steps: it will heat deuterium and tritium plasma to more than 100
million °C; keep hot plasma away from walls by strong magnetic fields; use high
energy helium nuclei to sustain burning plasma; neutrons will transfer their
energy to what is known as a “blanket”; and finally, in a fusion power plant, a
conventional steam generator, turbine and alternator will transform the heat
This will not be the first time nuclear fusion is used
to produce electricity; JET, located in Britain, achieved its first plasma in
But if everything goes to plan, ITER will generate 500 megawatts of
energy for just 50 megawatts invested – and that will be a first, explains
spokesman Robert Arnoux.
“ITER will not produce electricity; it will just
demonstrate that we can do it. It will demonstrate that we can do it for a
rather long duration, and it will demonstrate that we can amplify the action,”
Proponents of nuclear fusion point out that it produces no CO2
or other greenhouse gases, leaves no long-lasting radioactive waste, and
provides an almost limitless supply of fuel that can be widely distributed
around the globe.
Additionally, Arnoux points out, it cannot be used in
the proliferation of weapons – as it lacks the heavy elements that go into an
atomic or hydrogen bomb.
“This explains why the US and the Soviet Union
cooperated on nuclear fusion in the late 1950s, during the hottest period of the
Cold War,” he says. “Everyone has realized that there were no military
implications, because there was no proliferation issue.”
Right now, all
that can be seen of the reactor are its foundations – one level of several
hundred seismic pads, enclosed by thick retaining walls, which will isolate the
reactor from ground motion in the event of an earthquake. Most of the reactor’s
components are being constructed abroad, by the member states.
largest and heaviest loads will arrive at the harbor of Fos-sur- Mer, and
transported along a specially created 104km.-long route to
When completed, the Tokamak will weigh 23,000 tons, and reach
a height of 73 meters – slightly taller than the Arc de Triomphe.
of this sounds like a distant, almost utopian vision – it is, admits Arnoux. He
estimates that an industrial prototype is achievable by the year 2050, but that
there is no certainty it will prove commercially viable.
“We know that it
will work, but the problem is whether it will work very well, or just average,”
“Our industrial blueprint is crazy; no industry builds a machine
this way, but this is inherent to the project.
“This project is not only
about science and technology; it is about teaching the world how to build this
fabulous machine.”The writer visited France as a guest of the Invest in