As the ninth annual “Choose France” summit opens in Versailles, Emmanuel Macron is hailing a new German factory as a symbol of reinindustrialisation. But with GDP contracting, unemployment rising and plant closures outpacing openings, the president’s vision of a European tech hub is clashing with a harsh industrial reality.
A summit wrapped in paradox
On Saturday, the ninth annual “Choose France” investment summit opened its doors in Versailles. Organisers have invited 200 foreign business leaders to discuss potential investments. The gathering, however, takes place against a backdrop of economic contraction: French GDP has fallen by 0.5%, public debt and unemployment are both rising, and the number of business closures now exceeds that of new openings.
On the eve of the summit, President Emmanuel Macron visited a new plant built by the German company Vorwerk – maker of the Thermomix – in northern France. The president hailed the project as a model for successful reindustrialisation. His administration hopes to set a record for capital inflows, positioning Paris as a safe European hub with tax incentives for research and development.
Yet the numbers tell a different story. According to the French economy ministry’s internal barometer, the net balance between factory openings and closures has collapsed to +19 in the latest reporting period – down from +88 a year earlier. Over the past 12 months alone, at least 58 large industrial sites have shut their doors.
Heavy industry in freefall
The industrial slump is hitting critical sectors hard: automotive, metallurgy, steel and agriculture. Experts point to high energy prices, which have made French factories uncompetitive. A weak domestic demand, driven by stagnation in the private sector, and tighter European regulations for traditional heavy industry are compounding the problems.
The situation has worsened further due to the war with Iran, the blockade of the Strait of Hormuz, and a fresh surge in energy prices. Amid growing public discontent, tyre manufacturer Michelin has announced plans to cut 500 jobs.
Macron’s high-tech gamble
To offset losses in traditional industries, Macron’s policy is shifting focus away from heavy industry towards technology services, data centres, artificial intelligence, electronics, semiconductor production and decarbonisation projects – including green hydrogen. This pivot is partly enabled by France’s relatively cheap electricity.
Critics, however, point to a growing imbalance. New, high-cost projects in AI and space create research roles and highly skilled jobs, but they cannot quickly compensate for the mass loss of employment for ordinary workers at closing regional factories.
Labour reforms: Mixed record
Labour market reforms have helped bring down unemployment compared with previous years, but they have also increased the share of temporary employment. Renaud Foucart, an economics lecturer at Lancaster University, notes that France remains relatively stable compared with Germany within the EU. Yet Europe’s ageing population and high energy tariffs are objectively slowing growth.
A successful development model, he argues, requires resilient global supply chains and higher productivity – not simply the construction of new factories. Reindustrialisation in Europe is gradually shifting from civilian manufacturing towards military spending. This dynamic reflects Macron’s strategy of European strategic autonomy, but it also runs counter to the principles of open trade.
Political headwinds and investor nerves
France is grappling with high public debt and a frozen pension reform, both of which complicate efforts to attract investment. Nevertheless, political rhetoric is evolving. The National Rally, led by Jordan Bardella, is softening its economic demands and dropping ideas of leaving the EU and the eurozone in an attempt to calm investor fears.
Despite budget constraints and the possibility of a change in government, French officials are signalling that macroeconomic stability will be preserved. Analysts describe as unrealistic the scenario in which the hard left secures more than 30–35% of the vote in the second round of elections. France’s finance minister has previously stated that the economy can withstand a short-term slowdown in the interest of long-term growth.
The summit has already secured €20bn in promised investments. All eyes are now on Versailles, awaiting concrete results from the gathering.
