Signalling yet more bad news for France’s troubled economy, a United Nations report said the country saw a 77 percent decline in direct foreign investment last year, while the global average was an 11 percent increase.
France's results were the worst in the European Union, according to the United Nations Conference on Trade Development report released on Tuesday.
The decline meant $5.7 billion (€4.2 billion) less invested in France as the country battles stubbornly high unemployment, which at 11.1 percent, is an historic level. Investment around the globe jumped by $1.46 billion (€1.1 billion) during the same time.
France is not alone in its troubles. Fifteen of 27 EU countries were also hit with a decline in investment in 2013, which was part of a global trend of cash flowing away from developed countries.
However, some parts of Europe did well, with foreign investment jumping by a whopping 392 percent in Germany up to $32.2 billion (€ 23.6 billion) and a climb to $37.1 billion (€27.1 billion) in Spain, which was a 37 percent increase, the report said.
French daily 20 Minutes said the mood for foreign investors turned sour after President François Hollande’s election in 2012. Between fiscal belt tightening and Hollande’s perceived anti-business orientation, the climate scared away investors looking to spend.
Investors might be lured back by portions of Hollande's new policy package called the “responsability pact,” which has floated the idea of cuts in payroll costs for businesses that create jobs.
The plan, although criticized by left wing elements within his own party suggested Hollande was not anti-business as he is often made to be, and led to questions about whether he'd abandoned his socialist roots, a similar accusation that was laid at the feet of former UK Prime Minister Tony Blair and ex German Chancellor Gerhard Shröder.
Hollande has also called for reforms of the cumbersome French nanny state. In a new year address to civil servants, he said the state machinery was "too heavy, too slow, too expensive," and vowed to focus on cutting expenditure
"We will try and do this everywhere, or wherever possible," he said, pledging to make 50 billion euros (70 billion dollars) in savings by 2017. "Everyone must do their bit."
France has already unveiled a cost-cutting belt-tightening budget for 2014 that aims to bring down the public deficit from the current level of 4.1 percent to 3.6 percent of gross domestic product (GDP) through spending cuts totalling €15 billion and new taxes.