The overall feeling from a cross-section of French bankers, industry advisors and small business owners today is wait and see. The election of Francois Hollande as president has not created the panic depicted in the foreign media, but rather an emphasis on keeping to the status quo, at least in the short term. One sign of this stasis is that the French real estate sector is not worried.
The headlines abroad depicting high net worth individuals packing their bags for London and elsewhere to avoid paying more taxes are only true for those who were planning on leaving anyway assures Patrick Sanville, Director of Hotels for BNP ParisBas Real Estate. He explained that there will be no huge expatriation as "... people have their businesses here in France, their families are here." And the real estate market was already heading down after an almost ten year climb. "We were already expecting 2012 to not be at the same level as previous years, so the election did not change that." Yet in the luxury real estate sector in London, a win by Socialist Hollande seems to automatically translate as wealthy individuals moving to South Kensington. London-based Anak Russell, who sells to a very discrete high-end clientele, is expecting calls from more French clients. But in France the feeling is that the cross channel exodus is being exaggerated in the press.
High net worth Frenchmen and women will not be fleeing to London just yet to join their 300,000 strong expatriate community. Many of them are not multi-millionaires but the young French who have not been able to find work at home. Most French would simply rather remain in France -- it is looked down upon to think of leaving the country simply to avoid paying taxes. The quality of life overall is still higher than in the UK, and Paris is still Paris.
Francois Hollande may be a Socialist, but Sarkozy did not receive support from some of the most well-known leaders in the French business community. A few of the wealthiest people in France were openly critical of Nicolas Sarkozy. Francois Pinault, head of the PPR retail company and the holding company Artemis S.A. was quoted as saying that Sarkozy "was cooked" and would not win the election.
Advisors of industry, such as broker Paolo Crestani, who works for the leading insurance company in France, relates that his clients in the manufacturing and service sectors are not so worried about the results of the election as they are about the overall global economy. "The election of a new president is not going to change things in the short term. We are still worried about needing to be more competitive. The two areas of concern are primarily the parity between the dollar and the euro as well as the barriers to foreign products, such as those from China, flooding into Europe." And hiring will be slow, as SMEs are taking a wait and see approach. Eric Torcol, who is the Managing Director of the French paint company MPR, employing forty nine people, says he is ready to wait a year or two before hiring anyone. This tends to reflect the general belief that the French economy both slows down and starts up again more slowly than that of other countries.
Many entrepreneurs for whom Sarkozy's lowering of social charges and creation of various kinds of state aid for SMEs was a first step remain skeptical that Hollande will simplify what is still an extremely complex system, especially where hiring and firing are concerned. Founder and director of a Paris-based publishing company, Victoires Editions, Charles-Henri Dubail, works with forty employees and emphasizes that, "As entrepreneurs take risks when starting up new businesses, they need help during the development stage as well as more flexibility to grow in a way that is best for the company, as well as the employees." He, too, says he will wait and see how Hollande chooses to work with small business owners.
Things are more chaotic in Greece, resulting in the ultimate stalemate. As of an hour ago the market was already down seven a and half percent. The election of what are mostly nationalist, anti-austerity parties, be they on the left or right, only underlines the confusion. Some feel that Greeks would swallow EU measures only if handed out by a strong Greek leader. The executive of a local branch of an Energy Company believes that there will be a second round of voting. He adds that,
The only two parties which were in favour of the Troika, were the two "major" ones, New Democracy and Pasok. Their rulers had signed pledges to continue with the package post-election... So, that leaves two options: Either New Democracy makes government with Pasok and one more party, or we head for new elections.
In the new elections, we could head either way, but a wild card could be the pro-EU / pro-business small parties which were left outside parliament, as each one got 1-2 percent, making a coalition to get 5-6 percent, entering parliament with 20+ seats and being able to form a pro-EU government.
Everyone is wondering when it will be business as usual in Greece. But this will not happen until they have an actual government in place.
(This Greek Energy Executive, though providing an insightful analysis as well as his own opinions, declined to be named).