France defies critics with foreign investment paradox

But his efforts to revive competitiveness are being drowned out by a stand-off with global steel giant ArcelorMittal over its idled Florange steelworks, which the government threatened to nationalise. That threat followed minister for industrial recovery Arnaud Montebourg's blunt assertion that CEO Lakshmi Mittal was "no longer welcome" in the country.

All of which compounds some business leaders' concerns about the government's attitude to business after it earlier announced plans to hike taxes on big firms and levy a temporary tax of 75 percent on personal incomes upwards of 1 million euros a year. Economists said it could take several months or years to see what impact such concerns might have on foreign investment.

"If you're thinking of investing in Europe or in France and then this new government comes along, you might put plans on hold and see how things go," said senior OECD economist for France Peter Jarrett.

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