France

France is preparing to impose a 3 per cent digital tax on internet giants with global turnover of more than €750 million and turnover of more than €25 million in France, the Irish Times reported. The French finance minister Bruno Le Maire presented his draft law on the tax to cabinet on Wednesday and the text will go to the National Assembly in early April. It will take effect retroactively from January 1st this year. The tax will apply to the French revenues of some 30 international groups and is expected to raise €500 million annually.

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The Dutch government has taken a shareholding in Air France-KLM in an attempt to protect the country’s economic interests in the carrier, escalating tensions between Paris and The Hague, the Financial Times reported. Wopke Hoekstra, Netherlands’ finance minister, announced that his government had acquired a 12.68 per cent stake in the Air France-KLM holding group in recent weeks and will aim to build a shareholding equal to the French state at 14.3 per cent.

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Societe Generale SA is drawing up plans to cut jobs at its investment bank and find a partner for its cash-equity business in a bid to offset increasing cost pressure from regulation, people familiar with the matter said. The bank could cut hundreds or even thousands of jobs at its global banking and investor solutions unit, including roles in support functions such as finance and human resources, one person familiar with the situation said, asking not to be identified because the matter is confidential, Bloomberg News reported.

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The French government is considering buying out minority shareholders of Electricite de France SA, the first step in a corporate restructuring to address the challenge of replacing the country’s nuclear-power backbone, people familiar with the matter said, Bloomberg News reported. The government has asked EDF, of which it owns 84 percent, to propose changes in its structure. The utility’s cash flows are vulnerable to volatile power prices and intensifying competition, and it’s already struggling to fund billions of euros of investments to maintain or replace its aging reactors.

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France’s private sector slipped further into contraction in January despite a tentative recovery in its manufacturing sector, a closely watched survey showed on Thursday, the Financial Times reported. Disruption to business caused by a series of protests and blockages which swept the country at the end of the year resulted in the first contraction in the private sector for two-and-a-half years in December 2018. The latest purchasing managers’ survey from IHS Markit showed that turbulence had rippled into 2019.

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French manufacturing output fell in November, a further indicator that trade uncertainty and political tension in Europe could be cooling the eurozone, the Financial Times reported. The 1.3 per cent month on month slide in industrial output was worse than the forecast in a Reuters survey of no change, following two months of growth. Manufacturing was also down 1.4 per cent in November, a 1.2 per cent decrease from November last year, the French National Institute for Economic Studies reported on Thursday. Manufacturing output remained down 1.0 per cent over the quarter.

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France Buys Its Way To A Budget Battle

Dealing with the gilets jaunes protests has been difficult for Mr Macron’s government, the Financial Times reported. The leaderless movement stretches across the political spectrum and has a range of often contradictory demands. In Monday’s 13-minute speech, watched by 23m people, Mr Macron spoke of the need to address a “state of economic and social emergency” and accepted responsibility that the government had not been able “to provide a sufficiently fast and strong response” and acknowledged that “I may have hurt some of you with my words”.

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The French central bank has slashed its growth forecasts for the fourth quarter largely due to the impact of the often violent anti-government protests which shut down central Paris more than once in the last month. The Banque de France cut its expectation for growth in the last quarter of the year from 0.4 per cent to 0.2 per cent on Monday following another weekend of protest by the gilets jaunes, or yellow vests, the Financial Times reported. Bruno Le Maire, the French finance minister, has said the protests were a “catastrophe” for the economy.

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French carmaker Renault tapped its chief operating officer and a senior board member to fill in for embattled boss Carlos Ghosn, after an investigation by alliance partner Nissan led to his arrest on suspicion of financial misconduct, Reuters reported. Thierry Bollore, Ghosn’s operational second-in-command, will become deputy chief executive, while lead independent director Philippe Lagayette assumes the function of interim chairman, Renault said after a board meeting late on Tuesday.

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Steinhoff International Holdings NV is considering the sale of properties within French furniture chain Conforama, the latest move by the embattled retailer to shore up its balance sheet, according to people familiar with the matter. The value of the portfolio is about 800 million euros ($907 million), said the people, who asked not to be named as the information isn’t public, Bloomberg News reported. The properties are held outside European real-estate subsidiary Hemisphere, which is disposing of assets as part of a debt-restructuring deal, they said.

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