Macron Pushes to Privatize State Assets in Big Philosophical Shift
14 June 2018 - 1:19AM
Dow Jones News
By William Horobin
PARIS -- President Emmanuel Macron's pro-business overhaul of
France shifted up a gear Wednesday as the government announced
plans to privatize state assets and pour funds into risky
technology investments, a break with tradition in a country where
the state has wielded power in the boardrooms of large
companies.
The French government said it would change the laws that prevent
the state from selling shares in the airport operator Aéroports de
Paris SA, national lottery operator La Française des Jeux and
energy company Engie SA. Officials say the legal changes will pave
the way for France to start selling stakes next year to pay down
national debt and bolster a state-controlled innovation fund.
"It is vital to redefine the state's role in our economy. Do we
want a state that is content with getting dividends, or a strategic
state that prepares the future?" economy and finance minister Bruno
Le Maire said in a radio interview Wednesday.
The privatizations are Mr. Macron's latest move to shake up the
economy after rewiring labor laws, slashing corporate and wealth
taxes, and overhauling the state's railway operator. The
40-year-old president is betting that his rapid pro-business
overhauls will spur risk-taking, growth and job creation.
But his attempts to upend France's economic policies are meeting
with growing opposition. Rail unions have entered their third month
of on-off strikes in protest against his plans to end the monopoly
of railway operator SNCF and change working conditions. A video
released by his office of Mr. Macron complaining about the huge
sums of money France spends on welfare sparked further ire.
"Government policy can be summed up as bad business for the
country and good business for shareholders," Eric Coquerel, a
lawmaker from the leftist France Unbowed party said in a message on
Twitter. "These privatizations are shameful and contrary to the
interests of the nation."
Mr. Macron is also under pressure to quickly show results after
economic growth slowed sharply at the start of the year.
Unemployment hovers around 9% and France's public debt totaled 97%
of economic output at the end of last year.
The regulatory changes required for privatizations are part of a
broad economic bill to be presented by Mr. Le Maire next week that
will contain provisions to loosen regulation on small businesses
and increase profit-sharing with employees. The bill will also
include measures to incentivize French citizens to buy shares in
companies, a move government spokesman Benjamin Griveaux said would
engender a "People's Capitalism."
Current laws prevent the state from selling any of La Française
des Jeux, reducing its shareholding in ADP Groupe below 50%, or
reducing its voting rights in Engie below one third. The state
currently owns 50.6% of Groupe ADP and 24.1% of Engie's
capital.
The government will use some of the proceeds from selling stakes
to pay down debt, and earmark the rest for a EUR10 billion ($12
billion) fund Mr. Macron is building for innovation. Dividends and
interest from the fund -- which Mr. Macron hopes to eventually pool
with other European countries -- will be invested.
Mr. Le Maire said the state has around EUR15 billion locked up
in Engie and Aeroports de Paris.
"It's a lot of immobilized money," Mr. Le Maire said in an
interview with French daily Les Echos.
Write to William Horobin at William.Horobin@wsj.com
(END) Dow Jones Newswires
June 13, 2018 11:04 ET (15:04 GMT)
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