France’s Businesses Struggle in Aftermath of Unrest
Just weeks after massive protests and strikes over France’s pension reform finally subsided, businesses in the country are struggling to cope with the aftermath of a week-long unrest. According to the Confederation of French Businesses, the latest unrest, which erupted after a police officer shot dead a teenager last week, has caused more than 1 billion euros ($1.1 billion) in damages.
A federation spokesman said protesters looted 200 stores and destroyed 300 bank branches and 250 stores. A wave of riots erupted after a teenager was shot and killed during a stopover in a Paris suburb. In the following days, protesters in cities across France took to the streets to express their anger at the way the country’s marginalized communities are being policed and raise questions about whether race was a factor in the death of young man Nael Marzouk.
French President Emmanuel Macron said he believes the “peak” of violence is behind us, according to CNN. Speaking to the mayors of the 241 municipalities that witnessed the protests, Macron pledged his “full support”.
The French government is also looking at ways to help companies hardest hit by the unrest, Finance Minister Bruno Le Maire said. Le Maire said the company is considering eliminating or deferring social security contributions and taxes, adding that companies will have 30 days instead of five to file insurance claims.
According to credit rating agency DBRS Morningstar, these claims are likely to amount to less than 1 billion euros in estimated damages, indicating that many companies will not be fully reimbursed for their losses.
“We believe total insured losses in the French insurance industry should remain well below the €1 billion mark,” the agency added, noting that the French government was partially responsible for some of the losses.
“It is unlikely that the French state will cover the losses from the interruption of work caused by acts of vandalism, looting and the possible imposition of a curfew,” the department added.
More pain
At the same time, French businesses are now bracing themselves for even more pain as tourists, terrified by scenes of violence and chaos in France, decide not to travel to one of the world’s most popular destinations.
As of early July, foreign tourists had canceled 20 to 25 percent of their scheduled trips to Paris, Geoffroy Roux de Pesio, head of the Confederation of French Enterprises, said.
The turmoil comes at a bad time for the French economy, which outperformed the wider euro area in the first few months of this year despite months of protests and strikes as unions demanded the government scrap a plan to raise the retirement age from 62 to 64.
But the activity has since ceased. And the latest data showed French manufacturing contracted in June for the first time this year, at the fastest pace since February 2021, as the service sector reversed and the industrial downturn deepened.
