That is the title of an  article by Theo Vermaelen on the latest issue of INSEAD Knowledge. 
Here is a short excerpt:

"Except for students in a special economics section, French high school students get no education in economics or finance. So one explanation for the French attitude is that the vast majority of the people have no basic understanding of economics or markets. Those who get economics training in high school probably get a muddled message. I got this impression after taking a closer look at the content of the economics courses of the last year of the lycée or high school.

The topics discussed seem more appropriate for a sociology course. Out of the seven courses of the curriculum, four have titles such as ‘Social Stratification and Inequality’, ‘Conflict and Social Mobilisation’, ‘Integration and Solidarity’, and ‘European Integration and Economic and Social Policies’. There is no discussion of microeconomics (demand and supply) or firm optimising behaviour such as profit (or value) maximisation, or discussion of financial markets or free markets in general.

The seeds of anti-capitalism and anti-Americanism can be found throughout the curriculum. In the chapter on ‘Conflict and Social Mobilisation’, after a thorough analysis of Marxist thinking, the authors conclude that the “reasons for conflict with the other social classes remain strong. Although workers participate in mass consumption they use fewer services than other classes: they go less on holidays than others, they have less access to the internet and they don't have maids or nannies.”

In short, French people are still taught today that class warfare is the nature of (French) society and will remain as long as not all classes are equal. Of course, equality is not possible, as it would require that either all maids have maids or that there would be no maids."

I encourage you to read the whole article at:


BNP Paribas this morning announced its purchase of the Fortis Bank's Belgian operation.  The good news for Fortis retail outlet employees is that there will most probably be no danger of losing their jobs.  BNP has a very small presence in Belgium so there will be no cost savings to make from eliminating overlapping agencies or by making redundancies.  Life has been hard for many Fortis employees over the past couple of weeks, especially with the humiliation of having to sell ABN Amro at less than half what was paid little over a year ago.  So I hope they will be able to breathe a sigh of relief this morning and see this as a light at the end of the tunnel.  The fact that the Belgian State is now a shareholder in BNP Paribas should help Belgians to avoid the feeling that another important part of their economy, after Electrabel, has disappeared into French ownership. 

On October 2 Global Finance magazine ranked BNP Paribas as one of the World's strongest banks.  With the Belgian State now owning 12% of the Bank, as a result of the Fortis Deal, BNP Paribas would in all likelihood be rated even stronger only eight days later.  The Universal Banking model it has adhered to over the past few years and its strong deposit base have positioned it well to make more take-overs.  This morning it has let it be known that the next purchases will perhaps be in the United States, through its small Bancwest subsidiary.



The sub-prime meltdown has, in effect, had little direct impact on the French housing market.  A few banks such as Dexia, Natixis and the Credit Agricole have suffered from exposure to highly leveraged products generated in the United States but the biggest French banks such as SocGen and BNP Paribas have not suffered inordinately.

Nonetheless the knock-on effects of the credit squeeze are now having a negative effect on the availability of credit for such products as bridging loans.  Real Estate agents report that sellers are still trying to get the same prices as they did nine months ago and that buyers are having to prove much more credit-worthy than in 2007 before they can find a loan.  Niche markets such as those in the Dordogne, where many of the sales are restricted to British people buying and selling among each other are being badly affected by the plunge in UK house prices.



In 2007 it seemed that the subprime meltdown in the United States would have little impact on the housing market in France.  Realtor organisations such as the FNAIM said that house prices were dropping slightly in the provinces but holding up well in Paris.  Year on year increases per square meter would not be as high as in 2006.  

Prospective buyers were negotiating hard on price.  Real estate advisors found that they were having to manager vendor expectations and to advise vendors to post a lower sales price than they had expected to get only three months ago.

At the end of 2010 the situation is very different.  Apartment prices in Paris are increasing at least 10% year over year.  The reason for th


There are so many things going on in the French business and economy that I cannot do justice to them all.

If there is any general aspect of French business that interests you, please post a comment here and I will reply to it. 


Since being divested by Total to its shareholders in 2004 at €27 the Arkema shareprice has increased by 85% and it is now nearing €50.  Thierry Le Hénaff, the dynamic PDG (CEO) of Arkema, whom I recently heard on BFM business radio in Paris, seems to be revelling in his new found freedom.

The Arkema board meeting in Paris yesterday voted a share buyback program, but Le Hénaff states clearly that his strategy is one of investment, both in organic growth and in acquisitions.  He will soon have divested about €400 million of non-core assets and this will allow him to muster a sum of about €800 million for acquisition of small, specialized companies that fit his three-pronged strategy (vinyls, industrial chemicals and products to improve performance) and help him to make the overall business less cyclical and produce higher margins.

Le Hénaff also intends to invest about €300 million annually to make the overall business more compeititive.  Three percent of turnover will be invested annually in R&D, to strengthen the industrial capacity of Arkema based on its present resources and capabilities.  At present only about 13% of Arkema's sales happen in Asia, so sales growth in that part of the world will be a priority for him.  

As of today, Arkema has a turnover of €5.7 billion, has 80 plants throughout the world and employs about 17.000 people.  To learn more you can read this morning's financial newspapers, Les Echos or La Tribune (which, by the way, just earned an award for being one of France's best newspapers, based on its combined print and web presence).


Will Orascom, the growing Egyptian mobile telephone operator, take over Bouygues Télécom, the third biggest operator in France?  Bouygues Télécom provides most of the free cash flow available to its parent, Bouygues, the giant construction company.

Will Vallourec, the steel tubes manufacturer whose shares have increased by nearly 50% over the past couple of months, thanks to its involvement in the petroleum industry, be taken over by Arcelor-Mittal, by Gazprom or the Russian billionaire Roman Abramovitch?  The President of Vallourec, Pierre Verluca, seems to have a "never say no" strategy while playing his cards close to his chest and saying that Vallourec can continue to function perfectly well as a standalone operator.  He has said that Vallourec can also be a predator, with up to one billion euros available to purchase the company that provides the right fit.


According to the very interesting French trade magazine "Linéaires" the hypermarkets in the country are facing tough times.  The two biggest hypermarkets in France are run by Auchan and Carrefour, Auchan at Vélizy a suburb just outside Paris and Carrefour at Antibes on the Côte d'Azur.

The Auchan Vélizy store saw sales drop by 2% and the Carrefour Antibes store saw sales drop by 1.7%.  These decreases were larger than those of 2005.

Linéaires has established a league table of the top 100 hypermarkets in France.  Out of the top 25, 17 saw a decrease in sales.  If we look at the top 100 in more detail we see that Auchan owns 44 of them and Carrefour 43.  Of the remaining 13, Leclerc (a group of independent operators who have one or more hypermarkets under the Leclerc Brande Name) has eight hypermarkets, and Cora (a regional operator in France, founded by the Belgian Louis Delhaize) has four.  This leaves one to Géant-Casino near Marseille.  To learn more you can check out the website below or contact us.


An article in the "Le Figaro Réussir" supplement this morning calls attention to the fact that instead of government-style business the new France will be encouraging business-style government.  This is picking up on a trend that has been developing over the past 10 years.  This government will no longer be a regime that tries to impose its will on the private sector through parachuting into state-owned businesses some very business-unsavvy graduates of the Ecole Nationale d'Administration (ENA).  In fact the new government is one in which graduates of the ENA are nearly absent.

The new government put in place by Nicolas Sarkozy and François Fillon only counts two ministers who graduated from the ENA: Alain Juppé and Valérie Pecresse.  Nicolas Sarkozy himself graduated from Nanterre University with a law degree.  Nanterre was where the 1968 movement started.  After that Nicolas Sarkozy spent a couple of years in Sciences Po (l'Institut d'Etudes Politiques, aka IEP) in Paris. 

After 1945, the IEP/Sciences Po was downgraded to become a mere stepping stone to the ENA.  The ENA graduates quickly used their networks to put in place a career-development path to take control of the French political system and place their own people at the head of the state-owned monopolies. 

But if we go back to a time when graduates from the ancestor of Sciences Po had a major hand in government, 1870 to 1914, we can see that this was the period that finally put an end to the turmoil that had started with the French revolution in 1789.  It was a time when France began to catch up with the other industrialised countries in Europe, and the ancestor of Sciences Po provided in its own right many civil servants to a deliberately low-deficit, free-market France that rejoiced in small government.  At that time the French stock market was second only in size to the North American stock market.  

Is the new business-style government and the new Sciences Po model a harbinger of good things to come in France? 


The Universum French Graduate Survey shows that KPMG has jumped from 23rd position to 10th position among the employers which French Business Students (from the Ecoles de Commerce) would prefer to join when they graduate. 

Two companies in the luxury industry come in 1st and 2nd place : LVMH and L'Oréal.  Air France, which seems to be having a very successful merger with KLM, if its profits are anything to go by, is in 3rd place.  Danone is in 4th place and Canal+, a French cable TV company is in 5th. 

BNP Paribas is in 6th position and the next Bank is in 15th position, Socgen.  The SocGen people must be wandering why their investment in external communications, which is not much lower than BNP's, is not paying off to the same extent.

You can find the full results (not only for France, but many other European countries) at :