Expert opinion by Sana Lirin-Hales, co-founder of La Nouvelle Agence
At the heart of the political debate over France’s economic recovery, and as the country faces the prospect of yet another political crisis, France once again finds itself at a defining moment in its history on 8 September — perhaps once too often. By repeatedly testing the mechanisms of democracy, we risk undermining public confidence in the democratic process itself. The government is asking Parliament for its confidence at a time when all the signs point towards a growing wave of distrust.
But who exactly do we distrust? Politicians, business leaders, major foreign powers? Every new budget measure under consideration sends shockwaves through the business community, reigniting fears of an ever-deepening tax burden and of France falling further behind the world’s economic powerhouses.
French businesses face a double burden
The first challenge is cyclical. French companies, already weakened by an uncertain economic environment, are facing mounting tax pressure. New taxes are accumulating while existing forms of support are under threat: the burden is becoming increasingly difficult to bear. The second challenge is structural. The growth of digital businesses — key drivers of innovation and competitiveness — is being held back by a chronic lack of investment. As Patrick Martin, President of MEDEF, recently pointed out at LA REF 2025, the situation is no longer sustainable.
Behind every company lies a vulnerable ecosystem
It is worth remembering that a large company does not operate in isolation. Behind every flagship of the French economy are hundreds of SMEs and micro-businesses contributing to its success. According to the latest INSEE data, these small and medium-sized businesses account for more than 99% of France’s business landscape and employ more than half of private-sector workers.
Millions of people contribute every day to shaping our economy and society. When businesses are weakened, society as a whole suffers.
The blind spot: falling behind global giants
The real threat, beyond immediate budgetary considerations, is the risk of French companies losing ground to the economic power of the United States and China. Both countries are investing heavily in artificial intelligence, largely deregulated e-commerce and the new space-based telecommunications economy, while also introducing tariffs that put additional pressure on our businesses. France, already one of the world’s highest public spenders — with public expenditure representing 57% of GDP in 2023 according to INSEE — and with compulsory levies amounting to 44% of GDP according to the OECD, cannot afford to place an additional tax burden on its companies. As François Bayrou pointed out: “We cannot accept that France should be the country that spends the most public money, collects the most taxes, levies and contributions, while the French are nevertheless virtually unanimous in believing that public action is not working.”
Business leaders’ confidence is waning
We talk about interest rates, public debt and structural reforms. But we often overlook something essential: the trust we place in the women and men running our businesses, whatever their size. Entrepreneurs need visibility, stability and the confidence that their efforts will be rewarded rather than penalised. Without that confidence, there can be no investment, no hiring and no innovation.
Responsible leadership for sustainable growth
My conviction is simple: freeing businesses from the constant threat of additional taxation is key to achieving sustainable economic, social and environmental recovery. It is time to move away from a logic based primarily on taxation towards one based on incentives, rewarding companies that invest in digital transformation, training, job creation and reducing their environmental footprint.
The foundations of an ambitious policy
Radical simplification: Drastically reduce the administrative and regulatory burden weighing on businesses.
Targeted tax incentives: Encourage investment in the sectors that will shape our future, including digital technologies, renewable energy and the circular economy.
Trust and dialogue: Establish constructive and transparent dialogue with businesses and involve them in shaping public policy.
A time for action and stability
The time for hesitation is over. It is time to act. By choosing trust, incentives and simplification, France can unlock its entrepreneurial potential and pave the way for sustainable and inclusive growth. We must not allow the tax burden to stifle our economy, nor accelerate the decline of French businesses in the face of global competitors. France must therefore use both public procurement and private investment to support innovative French companies such as Mistral AI, Beem Energy, Electra and PayFit.
