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Competitiveness, appeal and investments: Frédéric Rochat analyses the economic challenges facing France in Le Figaro
Frédéric Rochat, Managing Partner at Lombard Odier
Article published on Le Figaro on 11 November 2025
Dissolution of the National Assembly, the fall of a series of governments, suspension of the pension reform, the proliferation of new tax proposals during the 2026 budget bill debate... The image that France has projected to foreign investors since summer 2024 can only be described as disturbing. In this context, the analysis provided by one of Lombard Odier's managing partners, the Geneva-based global wealth and asset manager founded in 1796, is instructive. According to Frédéric Rochat, Managing Partner with joint responsibility for the Group's private banking business, France is running the risk of squandering its real advantages. In this major interview with Le Figaro, Frédéric Rochat reflects on the choice of competitiveness for France, as the only possible way to ensure long-term prosperity.
Le Figaro: Is investing in France still attractive since the dissolution of the National Assembly?
Frédéric Rochat : France doesn’t always realise its great economic strength and advantages: a very high level of education, recognised research capabilities and its energy independence due to opting for nuclear power early on.
The country is blessed with both world-leading large corporations and a remarkable network of competitive, family-owned intermediate-sized enterprises (ETIs). The economy is performing so well that France has a savings surplus totalling 6% of GDP
The country is blessed with both world-leading large corporations and a remarkable network of competitive, family-owned intermediate-sized enterprises (ETIs). The economy is performing so well that France has a savings surplus totalling 6% of GDP. Thanks to this surplus, interest rates on French government bonds are still reasonable despite the high level of indebtedness. These savings must not be taxed beyond a reasonable level because they are needed to finance government budget deficits. Your question about the appeal of France is really about its competitiveness, which allows it to attract investments and talent.
Politicians too often think in closed circles. But France is rooted in the global economy and French capital and talent are mobile. We are living in an interconnected world where capital and talent flow very freely. France must keep defending its appeal: political and economic stability, and reasonable taxation by international standards. Reasonable compared not only with its European neighbours but also with the United States and countries in Asia. In a democracy nobody disputes the principle of paying taxes, but there are levels of tax that must not be exceeded. France is at a key moment: it must define its economic model for the years to come.
Western democracies face a choice between two paths. The first is the temptation to “tax and spend”: taxing more in order to spend more. It worked during the thirty-year period of economic growth in France between 1945 and 1975 with dynamic population growth; it is more difficult today with an ageing population. In the short term, it is tempting to hope that all problems can be solved by spending more. In the long term, it is dangerous: additional taxes weaken the economy, they put off investors and lead to talent fleeing abroad.
This temptation to tax and spend is not unique to France… The other possible path is that of competitiveness: spend less and tax less to maintain the competitiveness and health of the economic fabric, thereby ensuring prosperity in the long term
This temptation to tax and spend is not unique to France. The United Kingdom has recently chosen this path. The result is that since the start of the year 15,000 millionaires have left the country for Italy, Dubai or Asia. Tax and spend often leads to a loss of competitiveness, attractiveness and talent. The other possible path is that of competitiveness: spend less and tax less to maintain the competitiveness and health of the economic fabric, thereby ensuring prosperity in the long term. This second path also allows businesses to invest more in the infrastructure of tomorrow through appropriate incentive mechanisms. More investment is urgently needed in Europe.
Are the projects aimed at taxing the wealth of the wealthiest French citizens leading your clients to prepare to leave the country?
During the most difficult periods there has always been the temptation to turn against minorities: religious minorities, the ruling aristocracy during the French Revolution or, today, the very wealthy. But we must bear in mind that in most cases behind every small, medium or large fortune there is an entrepreneur, a business, and jobs. In this context of political instability and uncertainty, many entrepreneurs are asking themselves questions.
It is important to specify here that we are not at the moment seeing an exodus on the same scale as that observed in the United Kingdom
Most of them are firm patriots who are deeply attached to their country. All they want is to be able to stay in France and continue developing their businesses. But they can't not react to the fiscal threat. The first step for them is to offset the major exposure of their wealth invested in France, their country of residence, by diversifying their investments abroad. Depending on how the fiscal climate develops, the next step may involve leaving the country. But it is important to specify here that we are not at the moment seeing an exodus on the same scale as that observed in the United Kingdom.
At the end of the month the Swiss will vote on a project to tax inheritances of more than 50 million Swiss francs at 50%. Could this idea gain traction?
In France, Switzerland is seen as a tax paradise. But here in Switzerland we pay taxes, even if they have on the whole remained at reasonable levels. In our opinion, the initiative aimed at an inheritance tax of 50% on large estates has no chance of being approved.
But the simple fact that this initiative has been proposed shows that many, even in Switzerland, are not aware that we are living in an interconnected world and that the international competition to attract talent and entrepreneurs is formidable. Milan, Dubai, Abu Dhabi and Singapore are today favourite destinations. Not only because of their low tax rates but also because their leaders have opted for an attractive global economic policy.
Is there also a threat of a high tax rate being imposed on business succession here in France?
Family-owned SMEs account for over 70% of the economic fabric in France. The Dutreil pact [the French tax regime that provides a 75% exemption on gift and inheritance taxes for the transfer of business shares] has been a formidable tool allowing many businesses to develop and be transferred under favourable conditions. Calling it into question would not be without risk. The value of a business is theoretical, and not all shareholders would have the means to settle the tax bill in the event of a business transfer: does France really want the forced liquidation of all its SMEs and family-owned businesses? That would be disastrous for its economy.
We are very likely to see a regionalisation of markets between states that share the same values, such as the 27 EU member countries
Is economic activity in France affected by the domestic political situation, global geopolitics and international macroeconomics?
Yes, the economy has already been affected. The resilience of French economic players in a complicated, volatile and uncertain world is to be admired. There are short cycles and long cycles. After 1980 we lived through forty years of the world opening up to the market economy. That created a great deal of value, and an unprecedented number of people were lifted out of poverty. But globalisation has also had less positive consequences. Some countries have not played the game entirely straight, including China. While many countries became more prosperous, others suffered, especially in the West. This has led to a degree of de-industrialisation and the rise of populism and nationalism. Some powers, including China, would like a greater say in global governance. We are moving from a unipolar world a multipolar one, and this is not without its frictions.
We are thus entering a new long cycle. How will it be different from the previous one?
We do not believe in the end of globalisation or a return to an autarkic world. On the other hand, we can see in the area of rare earths that globalisation can become a source of vulnerability. The rules of trade are being rewritten. The United States is feeling aggrieved and creating tariff barriers. We are very likely to see a regionalisation of markets between states that share the same values, such as the 27 EU member countries. There will be the occasional controversy, such as that surrounding Mercosur at the moment, but the regions need to facilitate exchanges among themselves. The rules are being redefined, but this is not the end of global trade. Even a protectionist like Donald Trump realises that stopping all trade with China is simply not possible.
Europe, whose economy has remained at pre-pandemic levels, should seek inspiration from this tax credit model
Which countries are the most attractive to investors?
The United States continues to attract investments in pension funds and businesses. And this for good reason: it has low taxes, low regulation, very liberal employment laws and an entrepreneurial mindset. Its tax credit mechanism to finance strategic industries and attract corporations is an advantage. Europe, whose economy has remained at pre-pandemic levels, should seek inspiration from this tax credit model. In a context of lower rates in the United States, emerging markets are also becoming more attractive.
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