Business leaders’ morale at its lowest. “They are waiting to hire and invest” – Insolentiae

“They are waiting to hire and invest”: the morale of business leaders is at its lowest since the Covid crisis.

“We cannot ignore the economic costs of this political instability,” remarked a close associate of Bruno Le Maire a few days after the snap legislative elections that altered the political landscape. “Every day, business leaders voice their concerns to the minister. They are hesitant to hire and invest… All of this is detrimental to businesses.” This sentiment, which has been circulating in the halls of Bercy for weeks, is supported by INSEE’s figures released this Thursday. Based on responses from leaders in key commercial sectors, the business climate indicator “significantly” worsened in July, dropping to 94 points, a decline of 5 points from June.

“We don’t play with the economy”

“The economy requires visibility and stability. We are eager for reasonable, sensible, and pragmatic individuals from various political backgrounds to come to an agreement so that policies are clear, predictable, stable, and reassuring for economic players and consumers,” stated Patrick Martin. Given that the president has indicated he will not appoint a head of government before mid-August, this uncertainty is set to continue for several more weeks. Beyond concerns about instability, another anxiety is arising among business leaders. The president of Medef warns about the “profound threats posed by certain political proposals, especially from La France Insoumise,” to the economy.

“The economic measures proposed by the New Popular Front are widely rejected by entrepreneurs,” notes Croissance Plus. Nearly all (90%) of them oppose the elimination of the flat tax, specifically the single flat-rate levy of 30%—one of the proposals from the alliance that gained the most seats in the National Assembly. Another significant campaign promise from the left, an increase in the minimum wage to 1,600 euros, is also largely opposed by business leaders (66% “strongly against”). “If the minimum wage rises to 1,600 euros net, all economists agree it could lead to up to 200,000 job losses,” asserts Patrick Martin. He claims “entire sectors will collapse,” particularly cleaning, security, mass distribution, and construction. “We are not playing with the economy,” emphasizes the president of Medef.

One must be extremely economically naive and intellectually arrogant to imagine, in such a hyper-complex society, that simplistic ideas could destroy precarious economic balances with just a few measures.

What the left proposes is economic madness.

This economic madness stems from ideology, compounded by a significant lack of humility and the prioritization of ideology over substantial ideas and reality. It risks becoming a reality if Macron hands over Matignon to the NFP… signaling further planned wreckage for France.

Charles SANNAT

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Source Le Figaro.fr here

They Are Waiting to Hire and Invest: The Morale of Business Leaders at Its Lowest Since the Covid Crisis

The Current Landscape of Business Morale

The morale among business leaders in France has plummeted to its lowest point since the Covid crisis, as indicated by troubling statistics released by INSEE (National Institute of Statistics and Economic Studies). Business leaders are expressing concerns over their ability to hire and invest, which could have detrimental effects on the economic landscape.

Political Instability and Its Economic Costs

According to a close associate of French Minister Bruno Le Maire, the recent snap legislative elections that reshaped the political landscape have led to increasing uncertainty. Business owners are openly expressing their worries about the current state of affairs. “We must not believe that this political instability has no economic cost,” the associate stated. The business climate index, which reflects sentiments of executives across various sectors, sharply declined by 5 points in July, reaching a precarious 94 points.

Visibility and Stability in Economic Policies

Patrick Martin, the president of Medef (Movement of French Enterprises), stressed the importance of clear and stable economic policies. “The economy needs visibility and stability,” he explained, urging for cooperation across political factions to create consistent policy that instills confidence in economic players and consumers alike. The ongoing uncertainty around government appointments has left business leaders in a state of hesitation.

Concerns About Economic Proposals

As political instability lingers, alarm bells have begun to sound regarding specific economic proposals being considered by the government. Martin highlighted the “profound threats” posed by certain proposals from the left-wing party La France Insoumise. According to recent surveys, a significant 90% of entrepreneurs oppose the elimination of the flat tax, while 66% expressed strong disapproval of the proposed increase in the minimum wage to €1,600 net. Martin warns that this policy could trigger the loss of up to 200,000 jobs, particularly in vulnerable sectors such as cleaning, security, and construction.

Understanding Business Leader Sentiments

Business leaders are increasingly frustrated by what they perceive as economic madness driven by ideological beliefs rather than practical economic strategies. The notion that simplistic solutions could overhaul complex economic structures is regarded with skepticism. “You have to be extremely economically immature to imagine that you can destroy precarious economic balances with just a few measures,” cautioned Charles Sannat.

The Risks of Ignoring Economic Realities

Such ideologies threaten to destabilize the economic framework that has been built over time. Sannat argues that prioritizing ideological agendas over pragmatic solutions could lead to disastrous consequences, further deepening the crisis that many industries are already facing. The call for a balanced and realistic approach to economic policy becomes ever more pressing.

Impact of Economic Policies on Various Sectors

With the looming threat of significant policy changes, various sectors are bracing for impact. Here’s a brief overview of how some key industries are projected to be affected:

Industry	Potential Impact
Construction	Possible job losses due to increased labor costs
Mass Distribution	Strained profit margins from higher minimum wage
Security Services	Risk of layoffs as operational costs surge
Cleaning Services	Reduction in service availability owing to increased wage expenses

Benefits of a Stable Economic Environment

Creating a stable economic environment is crucial for fostering business confidence and growth. Below are some benefits associated with a reliable economic framework:

• Investment Growth: Businesses are more likely to invest in growth and innovation when they have stable policies and predictable economic conditions.
• Job Creation: A robust economy encourages companies to hire, increasing employment opportunities across various sectors.
• Consumer Confidence: When businesses feel secure, consumer spending tends to rise, boosting overall economic activity.
• Long-term Planning: Certainty in policies allows businesses to plan long-term strategies without fear of abrupt changes.

Practical Tips for Business Leaders

In the face of uncertainty, here are some strategies for business leaders to mitigate risks and navigate the tumultuous environment:

1. Diversify Investments: Explore diverse investment opportunities to reduce dependency on any single market segment.
2. Enhance Efficiency: Focus on streamlining operations and cutting unnecessary costs without compromising quality.
3. Engage in Advocacy: Advocate for policies that promote stability and economic growth at local and national levels.
4. Monitor Market Trends: Stay informed about shifting market trends to adapt swiftly to changes.

First-Hand Experiences: Stories from Business Leaders

Many business leaders have voiced their experiences during this turbulent time. Here’s a glimpse into their sentiments:

“Our confidence is shaken. We are waiting to see how things unfold before making any major decisions,” shares a CEO in the tech sector.

“Every day feels uncertain. We need stability for our workforce,” remarks a small business owner from the retail industry.

The Future Outlook for Businesses

As the political and economic landscape continues to evolve, the outlook remains uncertain. Business leaders are advocating for clear communication and a collaborative approach to economic policy-making. The importance of creating a supportive environment for businesses cannot be overstated—the health of the economy depends on it.

In summary, the current state of business morale in France reflects the significant impact of political instability on economic certainty. Through informed decision-making and an emphasis on practical policies, there remains hope for recovery and growth.

For more insights on economic trends and strategies, feel free to explore Charles Sannat’s take on these pressing issues at insolentiae.com.