France’s strategic industry may be jeopardized

Although it’s been proven wrong, the assertion according to which France is not the 5th world’s largest economy anymore but the 10th instead has spread among the population whose a mere 20% still supports President François Hollande. In a context of high risk tensions because of terrorist threats, ongoing mass unemployment and mounting fiscal anger, latest news about several jewels of France’s economy gave cause for concern. The market valuation of Areva, once the world-leading nuclear energy group, dropped 80% over the last 2 years on difficulties related to the development of the EPR and fraud accusations against former CEO Anne Lauvergeon in the controversial takeover of Canadian startup UraMin in 2007.

EDF, Areva’s main counterpart and competitor, remained the world’s largest producer and supplier of electricity however CFO Thomas Piquemal resigned because he feared the £18 billion Hinkley Point nuclear power plant project could jeopardize the group whose market valuation fell 65% since March 2014.  In the meantime, the SNCF, the national railway company, announced a net loss of €12 billion on depreciation of its infrastructures. The recent sale of Alstom’s energy and turbines business to GE didn’t prevent layoffs and was denounced as the end of France’s strategic defense independence. If France still can make a comeback to prevent a definitive downgrade, a change in the management of its most precious assets appears necessary.