Stock market: France is popular, by Jean-François Copé

Stock market France is popular by Jean Francois Cope

Who says new year, says good resolutions! In January, the gyms fill up while the meals lighten up. But, at the start of 2023, perhaps it is not too late to add to the long list of resolutions a watchword that our country is sorely lacking at the moment: positive lucidity. Clearly, let us congratulate ourselves on good news as much as we lament bad news! So, to console us (a little) for the solid cycle of strikes and demonstrations that awaits us in a few days, let’s go back to an event that went unnoticed at the end of 2022: the Paris Stock Exchange has become the leading European financial center in terms of capitalization , thus passing in front of that of London.

It is first and foremost a sign that several liberal reforms implemented during the previous five-year term have borne fruit. The introduction in 2018 of the single flat-rate levy (flat tax) has made the tax system for investments more readable. The Pacte law, passed the following year, made the equity savings plan more attractive by making its terms and costs more flexible. Undoubtedly more importantly, by excluding banking and financial investments from the tax base of the ISF, henceforth renamed IFI, the government has contributed to changing the way the French view these assets. The grotesque time when finance was designated as an “adversary” who would have neither name nor face seems to be over! The Stock Exchange is no longer the scapegoat responsible for all the evils from which the economy suffers but, on the contrary, a source of financing for French companies and a good investment for the French. This confidence is justified by the many assets possessed by French companies which fully benefit from the advantages of the European common market and its 450 million consumers.

The English are preparing for the return match

It is precisely this considerable contribution of which British companies were deprived when the United Kingdom left the European Union. And the establishments of the City have not escaped the rule: with Brexit, the English Stock Exchange has lost the “financial passport” which allowed it from London to sell financial products throughout the EU. The consequences were terrible: no less than 10,000 jobs and nearly 1,000 billion euros migrated to horizons more conducive to the exchange of European securities than those offered on the banks of the Thames. Contrary to the arguments held by the pro-Brexit during the referendum, the English sky does not seem clearer in the long term. Because the English companies still loyal to the City are also suffering from this loss of influence. Their leeway to develop, innovate and create jobs is shrinking at the same time as investors are turning away from the City. Since the resolution we took at the beginning of these lines leads us to optimism, let’s say that Brexit will at least have had one merit. That of proving to the Eurosceptics that an exit from the European Union, far from being a panacea, was, on the contrary, a source of additional crises in an international context which, however, is not lacking!

While optimism is in order, let’s not rest on our laurels. The English will have the opportunity to play their return match without delay. At the beginning of December, the British government already announced that it wanted to react quickly and strongly by proposing in-depth reform of the financial sector. Among the proposals on the table: require regulators to take into account the competitiveness of the City in their decisions, remove the cap on bankers’ bonuses or even lower the capital requirements of insurance companies. Nothing revolutionary, especially since on the French side, there is also room for maneuver to retain this new title. After having stimulated the supply of financing by rehabilitating stock market investment with individuals, it is now towards demand that we must turn. Brussels’ proposal to lighten the administrative costs of listing to facilitate stock market listing for small and medium-sized enterprises is therefore particularly interesting for the Paris market and, more broadly, for our economy. The session is open!