There is a huge gap between the emotional and economic situation in France and our financial image abroad, which remains excellent. CAC 40 has a long tradition of not being affected by domestic riots, because investors are confident that French companies know how to redeploy quickly their resources abroad, and come back as quickly when the riots are over.
Economic experts compare three internal crises in France: the three weeks of rioting that started in Clichy-sous-Bois in 2005 after two teenagers were electrocuted inside an electricity substation while trying to escape a police check; the fifteen months of the Gilets Jaunes crisis, from October 2018 to March 2020; and the current crisis, triggered by Nahel’s death following a police check in Nanterre.
Depending on the source, the cost to the French economy would be €200 million for the 2005 crisis, €250 million for the 2028 crisis, and on a comparable scale for the current crisis, which has already lasted 6 days. The financial impact is measurable: deterioration of businesses, in particular the major food chains, restaurants and luxury symbols such as jewellers and perfume shops; car, bus and tram fires; the cancellation of 20 to 25% of hotel bookings, at a time when summer accounts for a large proportion of sales; and the cancellation of concerts and theatre and music festivals. Since Thursday 29 June, public transport in France’s main cities has been closed at 9pm, resulting in a loss of revenue and, above all, a curfew mentality of sinister memory. The American, British and Chinese authorities have advised their citizens not to choose France as a holiday destination this year, further darkening the outlook.
Hit but not sunk, French companies are not giving up. The luxury sector, the jewel in the crown of French know-how, is resisting with panache. Paris Fashion Week, from 3 to 6 July, is still on. Direct fashion sales in France are worth €154 billion, including €36 billion from exports. More than 616,000 jobs are at stake. These companies, like others in France, have been looted in recent days, but none has cancelled any marketing event.
Abroad, given the situation in France, tourists are cancelling their bookings, but investors remain confident. The CAC 40, the showcase of the stock market, has a long tradition of not being affected by the riots. In 2005, during the crisis, it rose by 3.5%, from 4,458 to 4,622 points. In 2018-2019, during the Gilets Jaunes crisis, it appreciated by 2%, from 7235 to 7387 points. And since the current riots began, France’s flagship index has risen by 16%, from 4,792 to 5,744 points. Investors know that when the going gets tough at home, France’s major companies know how