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The Ambassador of France in Russia Jean-Maurice Ripert: Despite the crisis and difficulties the French companies have not betrayed Russia

13.11.15

On November 13, 2015 the Minister of Economic Development of Russia Alexey Ulyukaev held a meeting with French businessmen, members of the delegation of the Movement of enterprises of France, MEDEF. The French delegation was headed by co-chairman of the Business Cooperation Council of Russia – France, Deputy Director General of the Bank of Societe Generale Bernardo Sanchez-Incera. The event was attended by representatives of French companies: Reno, Total, Angie, Sanofi, etc.

The meeting participants discussed the prospects of bilateral relations in the current situation, new opportunities of doing business in Russia, measures taken by the Russian Government to improve investment climate.

Alexey Ulyukaev noted that commodity turnover continues to decline and, according to Russian customs statistics, in January – September, it declined by 40.5% compared to the same period in 2014. "The current situation is the result of the current situation in world trade," he said. But, according to him, the volume of French investments in the first quarter of 2015 in Russia increased by 607 million USD, successful cooperation between Russian and French enterprises continue in such industries as energy, space, automobile and aircraft manufacturing, in the building of transport infrastructure, nuclear power, and, besides, many large French companies have their own production facilities in Russia.

The Minister noted that the Russian-French Council for economic, financial, industrial and trade issues (CEFIC) takes an important role in the development of economic cooperation at the intergovernmental level. This year there is an active cooperation between working groups, although CEFIC for well-known reasons had not been convened for more than two years. "Based on the results of September meetings, an agreement was reached on holding the CEFIC session in Moscow early next year," - he said.

The head of the Russian Economic Department spoke about the current macroeconomic situation, which was complicated on the background of changes in the geopolitical situation and the decline in energy prices. He said that a set of activities had been developed to activate structural changes in the Russian economy, reduce inflation and achieve positive growth rates and macroeconomic stability in the medium term. "As a result - to date the Russian economy has adapted to the sanctions, the lower prices for hydrocarbons", - he stressed.

"The lowest point of the fall was the second quarter of this year - a decline of 4.6%. In the third quarter, GDP decreased by 4.1%. We hope that in the fourth quarter the figure will be less than 4%, maybe,  3.7-3.8%, and about the same figure will be by the end of the year," - the Minister said. According to him, we have passed the bottom point of the recession in June-July of the current year. "Since August, the GDP, cleared of seasonality, is not negative in some months - there is even a small plus, for example, in September, plus 0.3 percent", - he added.

He said that starting from 2016, we expect the recovery of economic growth, the forecast growth at 0.7%. "From the second quarter of next year, we look forward to having positive indicators of the dynamics of GDP in annual terms. We believe that this is due to the recovery of consumer demand and inventories in the economy”, - the Minister said.

 The situation in the banking sector counts in favor of it as well. We have overcome the liquidity crisis. Now the deposits of households and corporate deposits are growing quite fast - about 15% in annual terms. This means that funding for the banks is sufficient. And also since July, banks began to increase lending." However, he noted that inflation continues to be high but it will decline rapidly due to termination of the effect of the devaluation, and because of the base effect of last year will help this change. "Reducing inflation is the basis for the Central Bank to gradually reduce the key rate, and, consequently, the rates for end borrowers will have to decrease, which also will help restore economic growth," - he said.

Independent indicator, confirming the success of Russia's reforms, is the World Bank rankings on the conditions of doing business (Doing Business). "If in 2010 we were at the end of the second third, but now we are on the threshold of the top 50 countries", - Alexey Ulyukaev said. Russia entered the top five leaders in the number of reforms. Among them are simplifying the process of access to electricity networks, reduction of time of opening a bank account, facilitating access to credit and the procedure for setting up enterprises. "For us the main thing is not numbers, but the health of the business," - he said.

The Minister noted the importance of state support of exports. This year in the structure of GC "Vnesheconombank" there has been created the "Russian Export Center", providing "one window" for exporters in the field of financial and non-financial support measures, including cooperation with relevant ministries and agencies. He said that this instrument represents a wide range of services for the exporter: from information to financial support through the line of Roseximbank and the provision of state guarantees from the EXIAR.

In addition, Alexey Ulyukaev told about tools designed to promote the modernization of the national economy of Russia, support of small and medium enterprises, special economic zones, Institute of regulatory impact assessment. Another important element is the program of import substitution.

The head of the Russian Economic Department stressed that the country does not seek isolation, but rather is interested in the maximum localization in Russia of production by foreign, primarily French, manufacturers of competitive products, whose analogs are not manufactured in Russia. "All of these companies will receive benefits similar to those enjoyed by Russian enterprises", - he said.

The Ambassador of France in Russia Jean-Maurice Ripert noted that despite the crisis and difficulties the French companies have not betrayed Russia. According to him, the normal process of cooperation is fully restored between Russia and France. "The best proof that the French authorities trust the economic future of Russia, it remains an important partner for France and Europe – this is that France, based on 2014 results, was the first investor, if you look at the overall picture," - he said.

The head of the French delegation, Deputy Director General of the Bank of Societe Generale Bernardo Sanchez-Incera stressed that French companies consider Russia to be a territory of the present and the future. "Throughout the period, which was challenging from a geopolitical point of view, we endeavored best efforts in order to French companies remained a unifying force," - he said.

In conclusion, Alexey Ulyukaev reiterated that French companies are key investors in the Russian economy.

He invited French businessmen to take part in the coming jubilee St. Petersburg International Economic Forum, which will be held at the new venue of Expoforum. "I invite You from 16 to 18 June 2016 to participate in events of the Russian leading business communication platform, and to consider its new exhibition opportunities,"-  he said.

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