Despite political misunderstandings, economic relations are developing
As soon as Giorgia Meloni came to power, political relations between Italy and France suddenly became strained, especially due to a major diplomatic incident related to the migrant file. But, paradoxically, the economic relations between Rome and Paris are not only stagnant, but even developing. In the often out-of-phase relationship with the various political coalitions in power in each country, the “real economy” reminds us with facts that dynamism and economic synergy are more important than resolving political disputes.
But what do we really know about these synergies? What are their strengths?
The Franco-Italian economic ecosystem is represented by approximately 4,000 companies located on both sides of the Alps and employs more than 400,000 people in various important economic sectors such as banking, insurance, automotive, transport, energy, construction and public works, and maritime. sector, defense, steel industry, fashion, food industry.
The value of direct cross investments reaches 120 billion euros. Although the stock of French investments in Italy was greater (€74.3 billion) than Italian investments in France (€54.6 billion), the latter grew by 17.5% in 1 year and 133% in 5 years, making the transalpine country the third largest. After foreign investors France, Germany and England, it is the leading country in Europe in R&D investments.
The main Italian groups present in France are Leonardo, Stellantis, EssilorLuxottica, ERG, Atlantia, Webuild, Mecobat, Trenitalia, Chiesi, Generali, MSC, Prysmian, Chiesi, Edizione (Autogrill), CIR Group (KOS and Sogefi), Ferrero, Barilla. .
Among the main French groups present in Italy we find LVMH, Kering, BNP Paribas, Crédit Agricole, AXA, Lactalis, EDF, Engie, Véolia, Suez, Michelin, Air Liquide, Alstom, Thales, Décathlon, Leroy Merlin, Vivendi through Telecom. Italy, Iliad, Saint-Gobain.
Economic exchanges
Since 2014, bilateral trade has steadily increased to 103.8 billion, including 84.8 billion in goods and 19 billion in services. Compared to 2020, the increase in trade between Italy and France increased by 18%, France’s exports to Italy increased by 20.8% (38.9 billion euros), and imports from Italy increased by 17% (45.9 billion) compared to 2020. With better industrial integration, the two countries could significantly increase their trade volume and approach the level of trade between France and Germany in the next decade. In this context, the Quirinal Treaty, signed in Rome on November 26, 2021, can play a key role.
The perfect complement
If we take into account the specificity of each of the countries, we will see a perfect complementarity between the two economies. A large number of Italian exporting companies, as well as large groups, find a fertile ground for development in France thanks to the large-scale international ecosystem on the one hand, and the political stability that facilitates strategic investments on the other. And for good reason, Italian investments have focused on strategic sectors such as energy infrastructure (Saipem and Prysmian for offshore wind farms in Normandy and Brittany). The Prysmian group, a world leader in the energy and telecommunications cable systems sector, has been commissioned by RTE to develop and repair submarine cables connecting 3 offshore wind farms to Saint Nazaire, Fécamp and Calvados over a 15-year period. The Atlantia group (Benetton family) manages 1,769 km of motorways through Sanef and Sapn and 3 airports in Nice, Cannes and Saint-Tropez. The construction group Webuild is working on the new line 16 of the Paris metro, as well as Telt-Tunel Lyon-Turin and Telt-Puits d’Avrieux.
On the other hand, France has positioned itself very well in the Italian market at different levels. First of all, it builds a really big production chain in the fashion industry as well as the design sector. The LVMH group, as well as Kering or even Chanel, produce a large part of their products in boots. In addition to the manufacturing industry, France plays an important role in the country’s economy with finance and energy. In the energy sector, Edison (EDF group) is the second national operator. In the banking and insurance sector, major groups such as Crédit Agricole, Bnp Paribas and Axa are among the main players in the country. Finally, FrenchTech finds a market in full development in Italy. Therefore, some unicorns as well as startups are already established and developing with some success.
