Written by Hilary Barnes
The director general of France’s new Public Investment bank, set up by the government to help rebuild the country’s industrial strength, finds himself in direct conflict with the government after explaining that it was not the bank’s job to invest in dead-end companies that no other investors will touch.
When Nicolas Dufourcq was asked on April 18 why the bank had not offered to help save jobs at a loss-making oil refinery, now in liquidation, and to save two blast furnaces at a steel plant owned by Arcelor Mittal in north-east France, he replied:
“Because we would have lost a lot of money and it would not have been good business.“
The deputy chairman of the bank’s governing council, Segolene Royal, losing candidate in France’s 2007 presidential election, snapped;
“This statement is seriously off-course. He had no reason to say this.”
“The Public Investment Bank is not there to do business. If an industrial company is found to undertake the de-pollution of the oil refinery site the bank will intervene, I can promise.“
The controversial minister for industrial “redressment“, Arnaud Montebourg, who worked hard but in vain to save jobs at the Arcelor Mittal steel works as well as the Petroplus oil refinery, also called the director general to order.
“I have reprimanded the director general by observing that is not up to him to make a declaration like that, that the bank is a collective project, not a bank like the others, which ought indeed to try to provide finance there when the finance industry does not wish to do so.”
Ms Royal is the former companion of Francois Hollande, with whom she has three children. Her political career reached a new low in 2012 when she failed to be win election to the National Assembly. The job at the Public Investment Bank was seen as a plaster on the wound.
When it was announced, questions were raised to about the influence she might have on the way the bank is run. The government assured everyone that this would not be a problem. The bank’s executive board would make the investment decisions.
That does not seem to be Ms Royal’s understanding.
The French government always holds up the Public Investment Bank as an example of the structural reforms it is undertaking to make France more competitive.
This is the first time the public has learnt that this means losing money on industrial dinosaurs.