France, which once touted itself as a "startup nation" and reigned as Europe's business hub, is seeing its standing wobble. As President Emmanuel Macron's term nears its end, a survey found trust among U.S. investors—long a strong backer of the French economy—has plunged to a record low.
On the 18th (local time), Bloomberg reported that only 17% of U.S. investors surveyed in the annual poll by the American Chamber of Commerce in France (AmCham France) and Bain & Company had an optimistic outlook on the French economy. That is dismal compared with 72% in 2018, early in Macron's presidency. According to the survey, 55% of respondents said conditions in France worsened over the past year, and 77% said they do not believe the government is capable of carrying out necessary economic reforms.
U.S. corporations have cheered pro-business policies under Macron—such as corporate tax cuts and labor market flexibility—and poured massive capital into France. But the latest survey showed sentiment cooling sharply, with 28% of respondents saying they are considering reducing hiring going forward.
The decisive reasons investors are turning away are "political uncertainty" and the resulting "loss of social control." After early parliamentary elections in 2024, France's National Assembly fell into a hung parliament with no overwhelming majority, effectively paralyzing passage of the government's budget and additional economic reform bills. In October last year, Prime Minister Sébastien Lecornu, who became the shortest-serving prime minister in French history, left office just 27 days after his appointment. With Lecornu—the fifth prime minister appointed by Macron in the past two years—also falling, France's state governance has plunged into unprecedented chaos.
In particular, intense social turmoil—fierce protests over pension reform and habitual strikes in the public institutional sector—is seen as triggering investors' flight instinct. As the government fails to quell anger in the streets and to forge social consensus, France's chronic labor-management conflict risk has reemerged as a fatal obstacle to corporate management.
On top of that, with the 2027 French presidential election ahead and Macron required to step down due to a three-term limit, markets are dominated by concern that the hard-right National Rally (RN) led by Marine Le Pen could take power. Of the investors surveyed, 77% said, "We do not believe the government will deliver meaningful economic reforms before the presidential election."
External conditions are not favorable either. As the Trump administration in the United States makes the threat of retaliatory tariff more tangible, France's chronic fiscal deficits and pressure within Europe to boost defense spending are further eroding the appeal of the French economy. France has surpassed Germany to rank No. 1 in the European Union for attracting foreign direct investment (FDI), but the survey suggests that position has become precarious. A financial industry official said, "Investors dislike uncertainty the most," adding, "With no confidence about which direction France will take after Macron, capital flight is an unavoidable sequence."