France: Spain's gateway to Europe

Relations between Spain and France are those of competing neighbours but at the same time they usually act as partners and complement one another in any initiative involving both countries. The two countries share a long history of economic, trading, cultural and political links. While most of the time dialogue between French and Spanish people ends up being in English, this situation will change in the future. After English, Spanish is the second most widely studied foreign language in France, by over 2.5 million learners.

My international experience in other countries, with the processes of adaptation involved, have helped in my recent move to France as manager of the CaixaBank representation office in Paris. It is vital to get to know the local business culture.

“In France, the approach is very formal; professional relationships take precedence over personal ones; speaking French helps a lot; negotiating processes tend to be very slow; things are very hierarchical, and the price is the last thing to be negotiated.”

France has an important industrial tradition and a solid international projection. The French economy will improve its growth rate in 2018-2019, boosted by the gradual recovery of the labour market, rising business confidence and favourable financial conditions. Economic growth will be based essentially on internal demand*. The French government is trying to carve out a stronger international position for France and strongly supports the project of the European Union, as well as undertaking structural reforms to strengthen the country's future growth. All this is generating interest on the part of foreign firms who want to invest or carry on investing in France.

The French banking system in general is in a good state to adapt to the European Banking Union. Furthermore, France has a high rate of bank account penetration (99%) and a dense banking network, with about 36,000 branches. The top five French banks account for 80% of business and clientele, and also have a strong international presence. *­

“France today, as it has been for many years, is Spain's leading trading customer”

Spanish exports to the neighbouring country make up over 15% of the total in the French economy, to the value of 41,636 million in 2017. On the other hand, sales of French products on the Spanish market are also considerable, and Spain is currently France's second customer with a volume of 33,331 million euros in 2017, representing a surplus for Spain. Tourism and sales of vehicles, machinery, both mechanical and electrical, fruit and vegetables, plastic materials, cast metal and so on play an important part in the trade balance.*** Moreover, tourism is and will remain crucial.

 France today is a highly attractive country for Spanish businesses because of its unequalled geographical position in the heart of the European economic area. Moreover, it has an excellent transport network, making it the most logical gateway to the rest of the world for Spanish companies, and it has a qualified, competent workforce. Spain and France have even more things in common: cultural similarity and a legal and institutional framework that, in broad terms, is very similar.

Staff of the CaixaBank representation office in Paris.

“French investment in Spain accounted for 9.7% of the total in 2017, putting France in fifth place among the countries investing the most in Spain.”

Spanish investments in France, on the other hand, made up 14.1% of the total, making it the second destination for investments, behind the United States.  ****

Apart from some significant geographical, demographic and macroeconomic differences - France has just over 20% more land area than Spain, 40% more population and twice the GDP - the two countries share the same geographical region and common features, interests, strategies and goals.

There are arguments for thinking that trading and business relations between Spain and France will continue to grow and become stronger in the future. Communication and understanding will lead to new opportunities for cooperation between businesses from the two countries.

*CaixaBank Research

** Fédération Bancaire Française & Insee

***ICEX

**** Register of Foreign Investments. Secretary of State for Trade.